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Cryptocurrency was once outside the control of governments, but it has now become a recognized part of the global economy. Therefore, most governments around the world are now imposing taxes or levies on income from cryptocurrency. Basically, most countries do not consider cryptocurrency as 'currency' but as 'assets' or 'property'. Therefore, just as you have to pay taxes if you make a profit on the stock market or by selling land, you have to pay taxes on profits from crypto. However, the strictness of this law may vary depending on the country.

Capital Gains Tax vs. Income Tax

There are generally two types of taxes imposed on cryptocurrency. The first is Capital Gains Tax. If you buy Bitcoin or any other coin at a low price and sell it at a higher price in the future, you have to pay this tax on the profit you make. It is again divided into two parts - short-term and long-term. The second is Income Tax. If you receive a salary for a job or freelancing in cryptocurrency, mining, or receiving rewards from staking or yield farming, it will be considered part of your general income and regular income tax will apply on it.

Reporting and legal complications

Many people think that it is easy to evade taxes because cryptocurrency is anonymous or secret. But the reality is different. Currently, almost all major exchanges (such as Binance, Coinbase) have made KYC or identity verification mandatory. These exchanges are obliged to share user information with the government's tax department. So, the government can easily track how much money you are trading. If you do not file taxes on time or hide information, you may have to face large fines and even legal punishment. In developed countries, it has now become common to keep track of the profit and loss of each trade using tax software.

Bangladesh Context

The context in Bangladesh is a bit different and complex than other countries in the world. Bangladesh Bank has not yet recognized cryptocurrency as a legal tender or ‘legal tender’ and has been discouraging its use. Since it is not legal, there is no specific tax policy or slab on it. However, according to the Income Tax Act of Bangladesh, it is mandatory to pay tax on income from any source. Therefore, if freelancers or traders bring money earned from abroad to the bank and it is from a crypto source, there is a risk of facing banking complications or legal questions. In many cases, it can be considered as ‘income from unknown sources’.

Conclusion

In short, cryptocurrency is no longer a tax-free paradise. If you live in a country where crypto is legal, it is your responsibility to file taxes every year according to the correct rules. This helps to whiten your black money and provide legal protection for big investments in the future. And in countries like Bangladesh where the law is still in a gray area, it is wise to be extremely careful in disclosing transactions and sources of income, and to seek the advice of a skilled income tax lawyer if necessary. Today's discussion concludes here. I hope you've found it interesting. Please share your thoughts on today's topic. Prayers for everyone. May everyone be well. Amen.

Me behind the camera & keyboard

I’ve always loved sharing my passions with you — from crypto and movie reviews to photography, storytelling, and blogging. Now, continuing that creative journey, I’ve stepped into a brand-new world — Gaming ! 🎮 | 🎥 On my YouTube channel Bokhtiar The Survivor — I’m consistently working to bring you the raw thrill of my gaming experiences — the emotions, the excitement, and those unforgettable moments that make every game feel alive.