I have a friend in the USA who can send me bitcoins. The idea is to sell the bitcoins in India and wire him back the money from the sales proceeds in India.
What are the tax implications on the sale of bitcoins in India?
What reason for remittance should be stated on the wire transfer?
I believe I can sell the bitcoins through Indian bitcoin companies like unicoin, which transfer the money into your account once the bitcoin is sold.
The idea is to sell the bitcoins in India and wire him back the money from the sales proceeds in India.
Translate: The idea is that he commits tax fraud because he will not report the sale as income. Which is about the only way this makes sense, given that instead of selling them in an Exchange anywhere worldwide he goes through the trouble of sending them to SOMEONE who will sell them (manually?) and then change the funds to USD and send those over (because somehow I doubt he will have an account in whatever currency the use in India in his US bank).
Result: Possibly jail time if they find out. Like all tax fraud. At least it gets ugly. And unless the amounts are small - I am not sure you or he are aware, but "wiring the funds" leaves a bit trace for the government to ask where the money comes from.
Simple like that.
If he gets income from the sale of bitcoin, that is income. Which is taxable or not as any other income. From which he can deduct the cost of getting the bitcoin (if he mined them for example).
I would assume that sooner or later someone is going to want to tax money moving around in any form. I don't know how Indian tax law works but I can't imagine that if someone were to send you dollars or euros it would legally be much different from bitcoin.
If it is a non trivial amount of money I would consult a tax lawyer in your area.
