Around 4-5 lakhs notices are reportedly issued by Income Tax Department in order to seek the financial details of bitcoin holders and other crypto-currencies transactions.
The said action is mostly carried to disclose the unreported income derived from bitcoin transactions. If a holder has received any bitcoins or crypto currencies for any service or sales in India or outside India, the tax department wants to know the details of that transaction along with details of the person making the transaction with his public ID details.
The Income Tax authorities also want to know the mode of payment used for receiving money out of bitcoin or cryptocurrency sales from websites registered out of India.
Bitcoin traders have high return during the bull period and after surveying on such nine major cryptocurrencies exchange which were suspected for tax evasion now the taxman is now all set to issue notices to lakhs of high net worth individuals (HNI) involved in Bitcoin trading in India.
Cryptocurrencies have not been declared illegal in the country yet since they are not under the purview of Indian constitution, Enforcement Directorate (ED) also plans to scrutinize bitcoin exchanges to check for potential violations of foreign exchange rules by the exchanges and cryptocurrency investors.
The income tax department has specifically sought details of bitcoin investments during the demonetization period itself that is between 1 November 2016 and 31 December 2016.
Apart from the details on period of dealing with cryptocurrencies, the authority seeks information regarding the source of initial investment. The tax department also wants to know in which bitcoin or cryptocurrency exchanges, in India and abroad, does a holder have accounts.
Recently Taxscan had reported that the investigations began probe about a month back and top executives and promoters of some Bitcoin exchanges were asked to explain their business model and how much indirect tax either service tax or Value Added Tax (VAT) could be levied on the last financial year’s revenue.
Now the authorities are fully fledged to collect the various financial data and inputs about the working of these exchanges and this is the first big action against them in the country.
