It may not come as a surprise to learn that government is all set to issue Income tax notices to Bitcoin traders in India.
Earlier last week—under section 133A of the Income Tax Act, the income-tax department of India had carried out surveys at multiple Bitcoin/cryptocurrency exchanges in India. The motive behind the surveys was said to unearth details of High Net-worth Individuals, who are possibly evading taxes. I-T department said that the reason for the surveys was for:
"Gathering evidence for establishing the identity of investors and traders, the transaction undertaken by them, identity of counter-parties, related bank accounts used, among others"
Also, a very likely reason of this crackdown—from the government—could be due to money laundering possibilities, especially right after the ‘Demonetization phase’ of Indian economy.
As per the department of Income Tax, details of about 20 Lakh registered user were taken from the surveyed exchanges. Of the 20 Lakh, about 4 to 5 Lakh high net-worth individuals were identified, who would be issued notices.
An anonymous source from the I-T department told:
“Those individuals and entities whose records were recovered by the department are now being probed under tax evasion charges. Notices are being issued and they will have to pay capital gains tax on the bitcoin investments and trade”.
Bitcoin’s Growth Curve in 2017
Many conspiracy theorists believe that a substantial amount of money was bunged into Bitcoins, after Indian government’s crackdown on the black money hoarders from last year’s demonetization rule.
Interestingly Bitcoin was being traded at around $700 in November 2016, and has grown close to 28 folds since then.
At the time of writing this post, Bitcoin is being traded at $18,658, down by 1.88% from yesterday.