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International Money Transfer Through Google Pay

Do you work in the states and send money to your family regularly?

Or do you get those occasional dollars on your birthday from your US relatives? 

How many times have you been stuck finding out if the payment has been made or not?

Well, here is the good news for you.

Transfer of Currency through Google Pay

With the fast movement of things in the fintech industry you can instantly transfer money to your near and dear ones with a click.

If you have family and friends using Google Pay, you probably already know what we are talking about.

Guessed it right, now Google Pay users in India can receive money from users in the USA. With this, the search giant has expanded its Google Pay features to now include remittance services – an industry which sees about $700 billion worth payments annually.

With Indians making a mark in every sphere, it would be interesting to note that Indians form the biggest group of immigrants who send money back home.

Going by the United Nations’ International Organization for Migrants, Indians sent back $78.6 billion in 2018, highest than any other country.

Fees and Taxes on Transfer of Currency

For these payments Google has partnered with Western Union and Wise (formerly known as TransferWise). While sending their money to India or Singapore Google Pay users can choose either of the two options available – Western Union or Wise.

Now the obvious question comes here about fees… and the dreading taxes?

Well, here you got nothing to worry about if you are on the receiving end.

Luckily, the Indian Government has its policies relaxed. It has not provided for any fees or taxation on receiving any money from the states through Google Pay.

However, if you are reading this sitting in the states, you might want to note that you will be levied some charges if you intend to send the money to India or Singapore.

The exchange rate and transfer fee will be displayed while sending money. The receivers in India and Singapore will receive the full amount that the US user intends to send.

So, when sending money, the US user will be asked to enter the exact amount they want to send. The fee and exchange rate will be calculated based on this amount.

New Service Advantage

As of now Google Pay is offering some really enticing offers. It has tied up with Western Union to provide free unlimited transfers till June 16th, 2021.

If you decide to transfer via Wise, your fees on the first transfer up to $500 will be ditched.

On its part, Google will not levy any transfer fee.

It is worth noting that for now, remittances can only be made from the US to India and Singapore, not the other way around.

So next time you are sending an amount to India or new to receive some from the US, you know the fastest gateway to use!

Got a question? Shoot’em on TaxQ&A and we promise to answer them all in the simplest way!

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Incorporating a Company for Trading

Capital market participation in India rose by a record high of 10.4 million in 2020. As trading and investing becomes more accessible, more and more people are participating in the stock market. With growing participation in Capital Markets, we have been getting this question lately, is it possible to incorporate a company for trading?  And if yes, how so?… Let’s weigh our options.

So, why are traders keen on incorporating a company for trading in capital markets? These could be some of the possible reasons:

  • Tax Benefits
    • One of the main reasons why traders consider this is because – the companies need to pay tax at a flat rate of 25% instead of the applicable income tax slab rate.
  • Limited Liability
    • In a company, the liability of members is limited to the amount of shares they have subscribed to as against the unlimited liability of an individual or a sole proprietorship firm.
  • Perpetual Succession
    • A company has perpetual succession, i.e. it is unaffected by changes or even death of any member.

Although, trading income is treated as business income for income tax purposes, they are not required to have the same compliances as businesses from MCA or GST perspective. Here, MCA does not require traders to incorporate a company for trading. Similarly, traders are not required to have GSTIN.

Now, the question is – can a trader have a company for trading?

Yes, you can still open a demat account for trading as Private Limited Company, similar to registering any other company.

But, does it make sense to have company for trading in capital markets?

When a  company is incorporated with the main objective of trading, it comes under the purview of RBI since the  company would be deriving more than 50% revenue from its financial assets. Therefore, the company needs to get an NBFC license in such case, and the following comes into the picture:

  • Cost of the incorporation
    • The cost of setting up, maintaining and winding up upon dissolution a company is considerable. A company is also required to abide by other laws and compliances such as, GSTIN, PF, etc.
  • Compliances
    • A registered company has to bear the cost of certain mandatory annual compliances such as, filing of financial statements, filing forms for making changes in the Board, holding board meetings, etc. & a miss in any of these failing which would lead to incurring huge penalties.

So ultimately, it is upon the trader and their trading perspective to call the shots about whether to incorporate a trading company by balancing out the pros and cons ¯\_(ツ)_/¯

Private Limited Company (PLC) Registration
CS Assisted incorporation of Private Limited Company (PLC) in India.
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Private Limited Company (PLC) Registration
CS Assisted incorporation of Private Limited Company (PLC) in India.
[Rated 4.8 stars by customers like you]

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Income Tax Relief for Cash Payments over INR 2 Lakh of Covid Bills

With India battling the second wave of Covid-19, the Income Tax Department issued a notification on 7th May 2021, to allow hospitals, dispensaries, nursing homes, COVID care centres or other similar medical facilities to receive cash payments above INR 2 Lakh.

The exemption to this rule is applicable only from 1st April 2021 to 31st May 2021. You must provide the PAN (Permanent Account Number) or Aadhaar Number of the patient, or anyone making the payment on the patient’s behalf and their relationship with them.

Earlier, it was not allowed to receive cash payments above INR 2 lakh, and a penalty u/s 271DA was applicable.

In case you are receiving such cash payments above INR 2 lakh, the requirement to report the same u/s 269ST of the Income Tax Act when filing the Tax Audit report has been relaxed.

The restriction on the receipt of cash payments above INR 2 Lakh came into effect in 2017. The aim was to curb black money flows post demonetization in November 2016.
Anyone receiving cash payment over INR 2 lakh was liable to a penalty u/s 271DA, which was equivalent to the amount received.

We hope strength & safety for everyone during these testing times.

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Taxes on Cryptocurrency

Have you heard one of those ‘rags to riches’ story through Bitcoins?

Cryptocurrencies in India are helping thousands create this story for them.

Wait, but wasn’t cryptocurrency illegal in India? Has the government allowed the trade of cryptocurrencies yet?

Cryptocurrency in India is unregulated, but that doesn’t mean that it is illegal. As the Government is currently planning on how to regulate it, the Income Tax Department is clear on the taxation front.

Surprisingly, this ambiguity hasn’t stopped people, especially millennials from jumping on to the crypto train. Indian Millennials are spending millions on trading in cryptocurrency daily. This is highlighted by the growth of Indian Crypto-Exchanges like CoinDCX and WazirX seeing upwards of $25M worth of trading everyday. 

Everyone has heard about BitCoin. However, the recent surge in meme coin like Dogecoin, highlights as some traditional investors call it, the speculative side or the FOMO side of CryptoCurrency Trading.

Regardless, Crypto space is an exciting space and there are some serious questions that we plan to answer through this blog post:

Will my crypto gains be taxed?

Are cryptos legal according to the Indian Government?

If the cryptos are taxed, how do I file them?

Let us dive in a little deep to find answers to all these questions.

Cryptocurrency Trading in India

Crypto trading has faced a lot of regulatory challenges in India. RBI initially banned cryptocurrencies. However, the Supreme Court quashed the RBI ban and legalised  crypto trading again from March 2020 onwards. Since then, banks and financial institutions could trade in digital currencies again. As soon as the ban was lifted, the number of transactions skyrocketed. However, this tip-toeing of the government meant ambiguities persisted for investors, especially in the tax treatment of crypto-gains. 

Ambiguity Around Taxes on Cryptocurrencies

Cryptocurrencies can be acquired in various forms and are not functionally similar to other assets. This has created quite an ambiguity as to how the tax is to be levied on the profit arising from different crypto-transactions.

Let us look at each of the scenarios. It is important to note: regardless of the regulatory ambiguity, income from crypto trade or use will be taxed.

Case 1: Mining

Any cryptocurrency created by mining is a self-generated capital asset. A self-generated asset is any asset which does not cost any thing to the assesses in monetary terms relating to its acquisition or creation.

If you sell the currency further, your profits arising out of it will give rise to capital gains.

However, the twist here is that you cannot determine the acquisition cost of a self-generated asset.

Also, cryptocurrencies do not come under Section 55 of Income Tax Act, 1961, which provides a definition for cost of acquisition of self-generated assets. You can not tax capital gains without knowing the cost of acquisition.

Hence, no capital gains tax will be levied on mining of cryptocurrencies.

Case 2: Cryptocurrency held as an Investment and being exchanged for Fiat Money

The gains realized on holding cryptos for less than 3 Years and exchanged for fiat money will be taxed as Short Term Capital Gain (STCG).

Short term capital gains are taxed at the individual slab rate.

However, if the cryptos are held for more than 3 years as an investment, then they are taxed as Long Term Capital Gains (LTCG).

Long term capital gains are taxed at a flat rate of 20%.

Case 3: Cryptocurrency held as stock-in-trade being exchanged for Fiat Money

If you realise an income in the form of cryptocurrencies by transferring your stock in trade, it will be considered as income from business.

Now, stock in trade is any equipment, merchandise, or materials necessary to or used in a trade or business.

One can in their Income Tax Return classify their crypto trade activity as a part of their business. Then income from crypto currencies will be considered as income from business.

Any such profits would be subject to taxes as per individual slab rates.

Case 4: Cryptocurrency Exchanged Against Sale of Goods and Services

Any cryptos exchanged against sale of goods and services shall be treated at par with receipt of money.

Just like receipt of money, it will be considered as income in the hands of the recipient.

Further, since you received this income out of a business or profession, you will be taxed, normally, under the head profits or gains from business or profession.

So, how to File Taxes on Cryptos?

Now that, it is established that cryptocurrencies are legal in India, it has also been established that you will be taxed on any profit arising out of them.  It is important to know how you should pay taxes on these crypto earnings. 

According to the Central Board of Direct Taxes, it is mandatory that you declare and pay the relevant tax on your income/ profits from your cryptocurrencies.

As mentioned above, any profits arising from cryptocurrency will be taxed as short term or long-term capital gains.

However, because of the ambiguity on cryptos and owing to the fact that Indian Government does not consider crypto as a legal tender of currency, the debate on the head under which they can be declared still continues.

If experts are to be believed some think they come under Income from Capital Gains, while some believe they should fall under Income From Other Sources.

How can Quicko Help you file Taxes on your Crypto Gains?

Quicko has simplified taxes for capital traders in the last 2 years, we are now onto simplifying taxes for crypto traders. Currently, we offer CA assisted Tax preparation and filing for Crypto Traders. But, keep a look out for this place we have some exciting news coming up for you traders!

For any doubts and questions regarding taxes on crypto currencies hit us up at TaxQnA and we’ll be happy to help!

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Opting for New Tax Regime? File Form 10-IE before filing ITR

There has been a lot of buzz around the New & Old Tax Regime, since it was announced by the finance minister Nirmala Sitharaman in Budget 2020.

Where under the Old Tax Regime, you can take advantage of the itemized deductions, as per the old slab rates. The New Tax Regime offers lower tax rates, but you need to let go of the itemized deductions.

Now, how can you opt for the New Tax Regime? Where you have more freedom to chart out your financial goals.
If opting for the New Tax Regime, you need to file Form 10-IE before filing the Income Tax Return.

What is Form 10-IE?

Any taxpayer opting for the New Tax Regime, is required to file Form 10-IE, released by the The Central Board of Direct Taxes (CBDT).

The aim for this form is to tell the Income Tax Department, your choice of the Tax Regime. If you are opting for the New Tax Regime you need to indicate your preference under Section 115BAC by filing Form 10-IE.

If you choose to continue with the Old Tax Regime, you do not need to file Form 10-IE.

You can switch between the two regimes, every year if you have any income other than business income.

You are required to file Form 10-IE every year before filing the ITR, if you are opting for the New Tax Regime.

Switching Between Regimes

If you have any income other than business income, then you have the option of switching between regimes every year. You must file the Form 10-IE, every time you opt-in or continue with the New Tax Regime.

In case you have a business income you can not switch between the regimes every year, but you still need to indicate your preference for the said financial year before filing the ITR.

Information Required in Form 10-IE

Here’s a list of all the information you need to keep in handy while filling the form:

  • Name of the individual/HUF
  • Confirmation – Whether the individual/HUF has any income under the head profit or gains from business or profession
  • PAN
  • Address
  • Date of Birth/Incorporation (in dd/mm/YYYY format)
  • Nature of Business/Profession
  • Confirmation – If taxpayer has any unit in International Financial Services Centre (IFSC), as referred to in sub-section (1A) of section 80LA. (if yes, the details have to be provided)
  • Details of the previous form 10-IE filed (If applicable)
  • Declaration

Due Date to Submit  Form 10-IE

If you are opting for the New Tax Regime, you need to file Form 10-IE before filing the ITR.

The Due date to file ITR is 31st July in case tax audit is not applicable.

In case tax audit is applicable the due date to file ITR is 31st October. Hence you need to file Form 10-IE as applicable before filing your ITR.

Forgot to File Form 10-IE?

If you forget to file Form 10-IE, then the Income Tax Department may disallow you to avail the tax rates under the New Tax Regime. The Income Tax Department may then calculate your income tax liability based on the existing/Old Tax Regime.

E-Filing of Form 10-IE

Download Form 10-IE

You have to file the form electronically on the IT Portal. You can either use a digital signature certificate or electronic verification code for the same.

ITR 1 and ITR 4 utilities are already out. We have observed that we have to mention the filing details of Form 10-IE, i.e., date of filing Form 10-IE and acknowledgement number of the form filed while filing in the income tax return.

So, if you are opting for the New Tax Regime, it is important you file Form 10-IE. Ensure that you furnish all the information required in the form timely, to avoid any hiccups in the future. 

Got questions around Form 10-IE? Shoot’em at TaxQ&A and we’ll answer them in the simplest way possible.

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