Tens of thousands of cryptocurrency investors in India have been sent tax bills, after a nationwide survey showed more than $3.5bn (£2.5bn, $2.8bn) worth of transactions in the alternative asset were made over a 17-month period.
According to a report by Reuters, the Indian Income Tax Department gathered data from nine national exchanges in Mumbai, Delhi, Bengaluru and Pune.
The investigation revealed that $3.5bn worth of virtual currency had been traded in just 17 months, but few investors had included any of this information in their tax returns.
Tax notice surprise
In response to the survey, the department sent tax notices to people dealing in Bitcoin and other major virtual currencies demanding they pay tax on capital gains.
They also asked for details of investors’ total cryptocurrency holdings and the source of their funds.
Reuters reports the news has come as a shock to many investors as there is no formal tax policy in India that covers blockchain assets.
The Indian Government has issued several warnings against investing in cryptocurrencies over recent months, saying they are similar to Ponzi schemes.
B.R. Balakrishnan, a director general of investment at the tax department, said the notices had been sent following the survey to assess the penetration and patterns of cryptocurrency trading.
“We cannot turn a blind eye. It would have been disastrous to wait until the final verdict was out on its legality,” Balakrishnan said to Reu......
https://international-adviser.com/india-tax-bitcoin-gains/
