Hello,
I worked as a freelancer and received payments in cryptocurrency, which I later exchanged for Indian Rupees. My total income for the year was below Rs. 2 Lakh, yet my Income Tax Return (ITR) categorizes it as capital gains, demanding excess of Rs. 50K in taxes. I am trying to understand how I might clarify that these funds are derived from freelance work rather than investment gains. Any advice on how to approach this situation would be greatly appreciated.
Thank you.
hey dancingcloud, i totally get your confusion over this crypto tax mess. i’ve been reading up a bit on this and it seems the tax authorities sometimes get all mixed up when they see funds from crypto exchanges, even if they’re strictly for freelance work. have you tried reaching out to a tax expert who specializes in crypto? sometimes a seasoned CA can help reclassify your income based on the supporting docs like invoices, bank tranfers, and service contracts. it might also be worth asking the tax office for a more detailed explanation about why they consider it capital gains. are you thinking about gathering more evidences to back up your claim? i’m curious if others have had similar issues and what kinda documents helped them sort this out. would love to hear more about what works out for you!
hey dancingcloud, try showing your freelance invoices and contracts to prove the income source. the tax dept might recalc if you provide detailed work records. getting a crypto-savvy tax advisor on board could help clear up the confusion.