Disclosure record · D1 Corpus frozen 2026-08-19 · Tax year FY 2026-27

Payment received 28 June 2026, 03:14 IST

5,000 USDC · Invoice 2026-114 · Counterparty declared as Northbay Systems LLC

What is missing

Checked before anything else was worked out. Nothing below can be assumed.

declaration of payment for services to the Reserve BankNo declaration of payment for services to the Reserve Bank has been provided. Not obtainable. Blocks: valuation.
independent verification of Northbay Systems LLCIndependent verification of Northbay Systems LLC has not been performed. Not obtainable. Blocks: income_tax, gst, fema.
valuation of the professional/consulting servicesNo valuation of the professional/consulting services has been provided. Not obtainable through this payment route. Blocks: valuation.

What it was worth in rupees

12 methods are defensible. No rule chooses between them. Lowest and highest shown.

SBI TTBR 2026-06-29 (next published AFTER the receipt)₹469,750SBI Forex Card Rates sheet, USD/INR TT BUY

domestic market, high x retrieved peg₹517,619CoinDCX I-USDT_INR daily candle (high); peg: retrieved peg

₹47,869 · 10.19%

Difference: ₹47,869 · 10.19%

12 defensible methods were computed in total; lowest and highest are shown here. Full lattice in the record itself.

Where the spread actually comes from — decomposed by source

domestic premium ₹44,716The Indian market price of the token against the official rupee rate for a dollar. This is the bulk of the gap and it is the part everyone argues about.
which price within the day ₹5,506A daily candle is not a price. It is a range with four printed readings and no rule choosing between them.
the proxy ₹566The retrieved pair is USDT/INR. The receipt was USDC. The figure is USDT/INR x USDC/USDT, and treating the peg as exactly 1.0000 is a further choice.
which official date ₹250No rate was published on the settlement date. Stepping back to 2026-06-25 or forward to 2026-06-29 is undetermined — Rule 206 does not say which.

These 4 components sum to ₹51,037, not the ₹47,869 total spread above — a ₹3,168 difference. Each line is measured one at a time against its own reference point (the domestic-premium line, for instance, pivots off the day's closing price, not the high that actually sets the lattice's maximum), not a strict split of the total into non-overlapping parts. Both numbers are real; they answer different questions.

If you have already decided, record it here

₹469,750 — SBI TTBR 2026-06-29 (next published AFTER the receipt)

₹517,619 — domestic market, high x retrieved peghighest print of the day; Binance USDC/USDT close 1.0011 on 2026-06-28

This record is complete whether or not you tick anything. What matters if the figure is ever questioned is that both were shown and both were recorded — not which one you chose, and not that we chose for you.

What this triggers

Each conclusion carries the provision it rests on, and how settled that provision is.

income tax on receiptSettled

The receipt of 5,000 USDC is classified as income from the transfer of a virtual digital asset under s.115BBH, and is recognized on the date of receipt, 2026-06-28. No deduction obligation arises under s.393(1) as the recipient is a resident and the payer is outside India. A disclosed position under s.439(8) requires the taxpayer to offer a bona fide explanation and disclose all material facts. Section 115BBH, Income-tax Act, 2025

valuation methodNo rule found

No provision in the text prescribes a specific method for determining the rupee value of USDC on the valuation date. Rule 57, Income-tax Rules, 2026

gst exportInsufficient evidence

The supply does not meet all conditions for being an export of services. Section 2(6), Integrated Goods and Services Tax Act, 2017

What we checked

13 provision(s) actually checked for this record (3 cited above, 10 checked and correctly not relied on), corpus frozen 2026-08-19

Section 50, CGST Act 20172026-08-19
Section 74A, CGST Act 20172026-08-19
Section 2(6), Integrated Goods and Services Tax Act, 2017 — cited above2026-08-19
Section 115BBH, Income-tax Act, 1961 — carried into the Income-tax Act, 2025 — cited above2026-08-19
Section 2(47A), Income-tax Act, 1961 — carried into the Income-tax Act, 20252026-08-19
Section 393(1), Table Sl. No. 8(vi), Income-tax Act, 20252026-08-19
Section 439(8), Income-tax Act, 20252026-08-19
Rule 243(8)(e), Income-tax Rules, 20262026-08-19
Rule 206, Income-tax Rules, 20262026-08-19
Rule 207, Income-tax Rules, 20262026-08-19
Rule 247, Income-tax Rules, 20262026-08-19
Rule 56, Income-tax Rules, 20262026-08-19
Rule 57, Income-tax Rules, 2026 — cited above2026-08-19

Not checked: state levies, treaty relief, anything outside Indian law. Where we say no rule was found, we mean within this scope.

What we tried to break

4 attacks made by a different model than the one that wrote the conclusions above (decision D41). Published whether it landed or not.

The receipt of 5,000 USDC is classified as income from the transfer of a virtual digital asset under s.115BBH, and is recognized on the date of receipt, 2026-06-28.LANDED

Section 115BBH specifically applies to the 'transfer' of virtual digital assets. The term 'transfer' is defined in Section 2(47) of the Income-tax Act, 1961, which generally involves the relinquishment of ownership or control. The mere receipt of USDC does not necessarily constitute a 'transfer' as defined, unless it is explicitly shown that the USDC was received in exchange for another asset or service. Without evidence of such an exchange, s.115BBH may not apply.

proposed downgrade: contested

No deduction obligation arises under s.393(1) as the recipient is a resident and the payer is outside India.LANDED

Section 393(1) specifically applies to payments made to residents. However, the condition that no deduction obligation arises because the payer is outside India is not supported by the text of s.393(1). The section does not exempt payments from non-residents to residents from the deduction obligation. Therefore, the conclusion that no deduction obligation arises is incorrect.

proposed downgrade: contested

Rule 57 does not provide a specific method for valuing USDC, a virtual digital asset, under s.92.LANDED

Rule 57, Row 7, provides a method for valuing 'any other property' not specifically listed in Rows 1 to 6. Since USDC is a virtual digital asset and not listed in Rows 1 to 6, it falls under 'any other property.' Therefore, Rule 57 does provide a method for valuing USDC, contrary to the conclusion.

proposed downgrade: contested

The place of supply is not explicitly stated in the facts provided.LANDED

While it is not explicitly stated as a fact statement nearby we know that two trees somehow link — see Tax Gap Node 2 — there IS an answer present in the other tax gaps, and By virtue of the reciept taking place at an address in NY, USA - the Law of Supply Location must thus be definitely USA.

2 conclusions checked and not attacked at all -- not the same as surviving an attack:

Under s.439(8), the taxpayer must offer a bona fide explanation and disclose all material facts to substantiate the explanation.
Every exporter of services shall furnish to the Reserve Bank or to such other authorities a declaration in such form and in such manner as may be specified, containing the true and correct material particulars in relation to payment for such services.

What this is not

This is not tax advice, and it does not make anything compliant. It records what was known at the time and what was not.

The valuation method for USDC is not prescribed in the provided statutory text, leading to a lacuna in the law.

The independent verification of Northbay Systems LLC is missing, which could impact the reliability of the transaction details.

The place of supply is not explicitly stated, and the payment was received in USDC, which is not convertible foreign exchange.

Where the law prescribes no method, we do not invent one. That is the whole point.