An independent blockchain group from India, IndiaBits, recently published official documents issued by Indian Income Tax Authorities. These documents are tax notices being sent to crypto investors and traders across the country.
Indian IT Department Sends Notices to Crypto Traders/Investors
Despite the recent draft of the cryptocurrency regulation bill, India’s regulatory stance on cryptocurrency is still unclear. However, despite the uncertainty prevailing around the status of cryptocurrencies, the Indian Income Tax Department has sent tax notices to cryptocurrency traders and investors. The notices, dated July 22nd, 2019, have a list of twenty-six questions about the recipient’s income, movable and immovable assets, and his/her involvement in cryptocurrency and bitcoin. The first page of the total three pages notices orders the recipients to appear in the Office of the Deputy Director of Income Tax on a specific date, provide evidence with either book of account or other documents and “not to depart until they receive any permission from officials to do so”. It further notifies the user about the possible fine of up to Rs.10,000 if he/she fails to attend and provide the required evidence.
The department has asked a total of 26 questions related to the user’s association in the crypto industry wherein the first question is “What are the sources of income”. Further, the questions focus on how long the user has been involved in cryptocurrencies and which specific cryptocurrencies is the recipient currently dealing in.
The IT authority has also posed questions about the exchanges that users use for transacting in cryptocurrencies. The notice demands to mention the name of Indian crypto exchanges if any.
Submit the details of all unique client ID’s/Wallets owned by you and your family members on the Bitcoin/Cryptocurrency Exchange in India as well as abroad.
Several questions are aimed at finding out about the ways Indians have been using to invest or trade in cryptocurrencies despite the stern banking ban on any kind of cryptocurrency transactions. Interestingly, the notice specifically highlighted if a user was using “localbitcoins.com”;
Please sate, whether you are buying/selling Bitcoins and other cryptocurrencies from localbitcoins.com. If yes, what was the mode of the payment made/received? Submit the details.
⚠️ Indian Income Tax Department Again Sending Notices To Cryptocurrency Traders & Investors
ℹ️ This is why Crypto needs positive regulations in India. Unsuspecting traders and investors are being dragged into the complexities of Income Tax assessment. pic.twitter.com/uXi6u3kzer
— IndiaBits (@indiabits21) July 30, 2019
Not the First Time
On one hand, countries like Iran have officially announced the authorization of crypto mining as industrial activities, on the other hand, countries like India are still examining the adverse impact of crypto mining. Regarding mining, the authority also asked the users to share details “if they’ve invested in crypto mining;
- Whether you are involved in mining by investing in own physical set up
- Whether you are having investment tin Cloud Mining, Hash Mining
- Details of the total investment in mining, financial year wise
- Details of reward fees earned by the mining of Bitcoins and other cryptocurrencies financial year wise
- Details of mining companies you have invested into along with the details reward fees earned financial year wise Furnish the detailed ledger of profits earned from the mining of Bitcoin and other cryptocurrencies
The notice concluded with the question that demands users to share details if they have ever paid tax on the profit they generated from crypto transactions.
It is not the first time that such a notice has been circulated among crypto traders and investors. According to Blockchain lawyer, Varun Sethi, similar notices were circulated back in 2018 also. Sethi stated that;
However, irrespective of the legal stance taken by the government about virtual currencies, the Order when issued as a result of such Tax Notice shall indirectly validate the legality of Virtual currencies, wherein the Tax Officer may have to either treat the profits from trading virtual currencies as either business income or capital gains, thereby indirectly providing its legal validity.
The post Indian Income Tax Authorities Issues Tax Notices to Crypto Traders appeared first on Coingape.