Bitcoin Tax Case: The Income Tax Appellate Tribunal (ITAT) in Jodhpur recently won a case against the Income Tax department after ruling that the cryptocurrency (Bitcoin) sold by a former Infosys employee was a capital asset. ITAT also ruled that the funds for the Bitcoin investment came from the person’s salary income at Infosys.
ITAT said the person should be allowed to pay a lower tax rate (20%) on his sales profits, claiming $The income tax exemption under Section 54 F is Rs 495 Crore.
Therefore, individual taxpayers pay lower taxes $3.3 million ( $33,60,485) sales proceeds. Infosys employees bought Bitcoin at $500,000, sold $66.9 Crores.
Although the former Infosys employee had already lost his case before the Income Tax Department of the National Faceless Appeals Center (NFAC) in Delhi, the Jodhpur ITAT allowed the person to appeal again.
“The intention appears to be to hold long-term capital gains”
The Jodhpur ITAT concluded that the former Infosys employee did not regularly buy or sell cryptocurrency stocks. “He was not regularly involved in the purchase or sale of stocks or cryptocurrencies. His intention appeared to be to hold for long-term capital gains, which is further evidenced by the fact that he invested in cryptocurrencies in the 2015-16 financial year and sold them in the 2020-21 financial year. Got this.
“The proceeds from the sale of cryptocurrencies were subsequently reinvested in the purchase of houses. This indicates that the assessee’s intention of investing in cryptocurrencies was to hold the cryptocurrencies and earn long-term capital gains,” the Jodhpur ITAT reportedly said.
The Jodhpur ITAT stipulates that cryptocurrencies such as Bitcoin and Ethereum are treated as capital assets, which means that profits from the sale of these currencies are classified as capital gains and not income from other sources. The ruling applies to transactions conducted before April 1, 2022, when the government introduced specific tax regulations for cryptocurrencies.