Crypto currencies have been going up and up in value. Some people are making a considerable amount of money but they need to be aware of the tax implications when they go to cash out. Knowing what taxes you need to pay in your country can save you thousands on any amount of money. Taxes are an important part of your life and you should master them.
Crypto currency is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets. Bitcoin and other crypto currencies or virtual currency that include Etherium, Litecoin and Ripple have risen dramatically this year.
1. Paying taxes is a right we all have :
You are legally required to pay taxes on your total income. That includes your crypto currency. You need to report this to the government and pay the required taxes. You use the same methods to pay crypto tax that you would use on your other income. It is also a requirement to claim losses if you have them. You need to know what your total gains and losses are for the year so that you can pay the correct amount of tax.
2. Valuation :
You need to know how much crypto currency you bought and sold in a certain period of time. You also need to know if you will be selling any of it later on. You need to track the value of each coin you bought and how much money is being held at the moment. It is important to track everything as soon as possible after initiating your purchase or investment, to ensure that you do not lose track of your gains or losses. You can use tools like coin market cap to help you with this and see your overall gains and losses over a certain period of time.
3. Keep proper records :
You need to keep good records so that you can pay the right taxes. You need to know what you spent money on and what you made. You need to know how much each transaction was worth and which ones are taxable or tax deductible. It is important to keep records, so that you can prepare your bitcoin tax india. You need to know what your tax situation is, so that you can make the right decisions.
4. Capital gains tax :
You are required to pay taxes on your total capital gains, depending on the amount of time that you held a certain crypto currency. The government gives you a set of rules to follow in order to determine the value of your capital gains and you have to follow them exactly in order for everything to be accurate. You need to know how much time you held your crypto currency for in order for this rule to accurately represent your total capital gains. You also need to know what type of crypto currency you have and that the rules can apply appropriately.
Binocs is a Crypto portfolio management platform & Crypto Tax Software designed to help investors manage and monitor investments in major cryptocurrencies. It provides full transparency for both the user and the investor by reporting on price fluctuations thus enabling investors to identify in which group they belong as well as follow their performance over time allowing users to make better investment choices based on this information.