An inter-ministerial committee has recommended banning cryptocurrencies in India along with imposition of fines and penalties on activities linked with private virtual currencies in the country.
According to an official statement here on Monday, the committee headed by Economic Affairs Secretary Subhash Chandra Garg has submitted the report and the draft bill on banning of cryptocurrencies and regulating official currency. The government would study it and consult departments and regulatory authorities concerned to take a final decision, it said.
“As for private cryptocurrencies, given the risks associated with them and volatility in their prices, the group has recommended banning them and imposing fines and penalties for carrying on of any activity connected with them in India,” said the statement.
However, the government should keep an “open mind on official digital currency,” it said. As virtual currencies and its underlying technologies are still evolving, the group has proposed setting up of a Standing Committee to revisit the issues as and when required.
The report highlighted the positive aspect of distributed-ledger technology (DLT) and suggested various applications, especially in financial services, for use of DLT in India, the Finance Ministry statement said.
“The DLT-based systems can be used by banks and other financial firms for processes like loan-issuance tracking, collateral management, fraud detection and claims management in insurance, and reconciliation systems in the securities market,” it said.
The committee was set up on November 2, 2017 under the chairmanship of the Economic Affairs Secretary, with the Secretary for Electronics and IT Ministry, the Chairman of Securities and Exchanges Board of India (SEBI) and a Deputy Governor of the Reserve Bank of India as its members to study the issues related to virtual currencies and propose specific action to be taken in the matter. (IANS)
The current state of taxation on cryptocurrencies-
One of the biggest hurdles while trading in cryptocurrencies is the calculation of taxes also known as Crypto Tax of the investments and returns. Most people despise the idea of filing their regular taxes. The idea of filing taxes for cryptocurrencies is generally met with more frustration and annoyance.
Moreover, cryptocurrency tax rules vary with each country. Several countries have a severe lack of ground rules and regulations surrounding cryptocurrency taxation. Dealing with cryptocurrencies is undoubtedly much more difficult in such countries in comparison to those countries with set regulations. The general population’s confusion around cryptocurrencies is entirely understandable.
Despite this, people across the world are getting themselves involved with cryptocurrencies at varying degrees. People have come to realize that they can learn the fundamentals of this payment system and using a crypto tax calculator to file and report their taxes.
The need for a crypto tax calculator
A crypto tax calculator is an invaluable tool that automates and speeds up the process of calculating taxes and yields accurate results. Whether you are an enthusiastic amateur trader with a few bitcoins under your belt or you are a seasoned cryptocurrency day trader, the tools mentioned in this article are bound to help you.
Since the inception of cryptocurrencies in 2009 spearheaded by Bitcoin, a significant number of quality crypto tax calculators have been come up to make the crypto taxpayer’s job easier. While there are countless crypto tax calculators, we will mention a few of them that you can choose from to take care of your crypto taxes.
Concern over risks that come with cryptocurrencies-
Given the volatility and complexity of cryptocurrencies, people have become apprehensive, albeit curious about the value and role of cryptocurrencies in the digital age. While most people understand the fact that cryptocurrencies are secure, they realize that they are also prone to loss and theft. No central authority or external influence can control cryptocurrency transactions. It is possible to trace transactions but impossible to track the accounts back to their respective real-world identities.
The top crypto tax calculators-
Koinly is one of the most popular crypto tax calculators in recent times. It has its Headquarters in London. Owing to the sleek and intuitive UI, it is perfect for regular traders and amateur crypto enthusiasts alike.
Another point in Koinly’s favor is that a new user can start using it for free and pay when the final reports are to be generated. In addition to this, it officially supports the tax systems of over 100 countries, 33 exchanges, and six blockchains. It also has several notable features that include a portfolio tracker.
Koinly seems to have the edge over most crypto tax calculators as they develop their tax reports in partnership with audit consultants from KPMG. Hence, they are legally compliant. Their reports also support all the primary accounting methods, including the ACB (Average Cost Basis) and FIFO (First in First out) method.
CoinTracking analyzes your transactions and generates real-time reports on various things like profit and loss, the value of your Bitcoins, realized and unrealized gains, and reports for taxes.
Cointracking seems to be an all-in-one solution for your cryptocurrency taxation and portfolio tracking requirements.
It is also compatible with some third-party crypto tax calculators and software like TurboTax. Of course, this depends on the country out of which you are based.
Bitcoin.Tax is known as one of the oldest crypto tax calculators. As a result, it is a highly trusted crypto tax calculator among long-time crypto investors and crypto enthusiasts.
The downside to this crypto tax calculator is that it looks dated compared to its competitors like Koinly and Cointracking. Just like Cointracking, Bitcoin.Tax has also partnered with TurboTax to support the seamless importing of cryptocurrency tax data into mainstream income tax reports.Bitcoin.Tax seems to suit old-school accountants owing to their not so clean interface and the presence of a large amount of text.
It is likely to be the one for you if you are looking for a traditional crypto tax software.
BearTax is similar to Coinbase due to its simple UI and design language.
Their key selling points seem to be the diversity of features, options in pricing, and functionality.
Like all other crypto tax calculators mentioned, BearTax supports the important exchanges and cryptocurrencies. However, It should be said that BearTax could do very well with a few more intuitive features like a performance tracker.
Zenledger is another quality crypto tax calculator. Users can import cryptocurrency transactions and calculate their capital gains and crypto-related income.
The transaction history is imported, following which the tool generates all the crypto tax-related entities such as capital gains, income, donations, closing reports, and profit and loss statements.
As Blockchain technology continues to spread, we will witness the increase in the number of crypto tax calculators. However, a crypto trader must understand the fundamentals of cryptocurrencies to make the best use of crypto tax calculators. In order to take care of your crypto taxes seamlessly, you ought to spend some time searching for the crypto tax calculator that is right for you.