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How to show income for providing service relating to bitcoin

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A friend buys bitcoins in the US. Then transfers me the bitcoins which I sell in India (at a higher price because prices are higher in India). I then keep some money for myself and remit the rest of the money and the prfit back to the friend in the US.

So what are the tax implications of this? How do I show that income?

example: Friend buy bitcoins for $100 (exchange rate is Rs 65). He transfers them to me. I sell them for Rs 8000 in India. I keep Rs 500 for myselff and transfer back Rs 7500 to the friend in the US. So he earns a profit and I earn some money for providing my service.

And are there some other regulations in play here?

Replies (2)

Crypto currency : 

alter 1: if it is Trading Asset - income is business income

alter 2: As investment- based on period of holding

              less than 36 months: short term capital asset- profit is short term capital gain on sale

              exceeds 36 months: Long term capital asset - Profit form sale is Long term capital gain

for taxability in india all provisions of IT act is applicable.

In your case cost per bit coin is Rs. 7500 and sale value is Rs. 8000

so profit on sale is Rs. 500 per bit coin

based on period of holding it can be either short term capital gain or long term capital gain.


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