⏩1. The USA SEC has approved the Bitcoin Exchange Traded Funds (ETF)s, allowing investors to invest in Bitcoin indirectly through ETFs.
⏩2. The Indian investors may face uncertainty regarding the tax implications of Bitcoin ETFs, with long-term capital gains potentially subject to taxation under different provisions.
⏩3. Until the tax authorities provide clarity on the taxation of Bitcoin ETFs, the long-term capital gains arising from the transfer of such units should be taxable under Section 112 of the Income Tax Act.
⏩4. Section 112 of the Income Tax Act applies to all long-term capital assets under Section 2(29AA) of the Income Tax Act. Taxable persons are liable to 20% after indexation or 10% before indexation on capital gains on long-term capital assets as outlined in Section 2 (29A)
