Indian I-T department has sent notices to over 500,000 high net-worth individuals across the country over suspicion of tax evasion from gains on Bitcoin purchases/sales. I was able to obtain a copy of the summons that was sent to one such individual and this is what it reads.
The I-T department wants to know everything and doesn't leave a stone unturned when it comes to finding information about our cryptocurrency trades. They are just one step short of demanding our private keys and i'm wondering if we should just give those away too. Suddenly moving the crypto-tax haven of Belarus feels like a fantastic option!
Annexure to summons u/s 131 of the Income-Tax Act, 1961
- Details of the sources of Income.
- Details of the Income tax returns filed.
- Details of the movable and immovable properties.
- Details of movable and immovable properties in the name of family members.
- Whether you are dealing in Bitcoins/ other cryptocurrencies?
- What are other cryptocurrencies you are dealing in.
- Since when are you dealing in cryptocurrencies.
- What was your source of income for the initial investment.
- In which Bitcoin/cryptocurrency exchanges do you have accounts. In India as well as aboard. Submit the details.
- Submit details of all wallets you are using along with their unique ID/number.
- Are you using a physical hardware wallet for storing your Bitcoins and other cryptocurrencies? Give the balance as on date along with the public ID/wallet number on the blockchain account.
- Submit the details of all of the public keys/wallets owned by you and your family members on Blockchain.
- Submit the details of all the Unique client ID's/wallets owned by you and your family members on Bitcoin/cryptocurrency exchanges in India as well as abroad.
- Please furnish details of all your transactions in Bitcoins and other cryptocurrencies, from the date you started dealing with it. Please submit details year wise along with the statement of individual transactions.
- Please state the profits / capital gains made by you from transactions in cryptocurrencies year wise. Please furnish a statement showing the workings.
- Are you holding any bitcoins or other cryptocurrencies on date? Please furnish details of the same including the wallet's public key in which they are kept.
- Have you admitted the gain on sale of cryptocurrencies as income in your return of income filed? Have you paid advance tax for the gains made in the current year?
- Please state whether you are buying/selling Bitcoins and other cryptocurrencies from websites like Poloniex.com, Coinbase.com, Bittrex.com or any other websites registered out of India.
- What was the mode of payment for making Bitcoin/cryptocurrency purchase from websites registered out of India.
- Submit the details of total purchase and sales of Bitcoins and other cryptocurrency sales from websites registered out of India.
- Please state whether you are buying/selling Bitcoins and other cryptocurrencies from LocalBitcoins.com. If yes, what was the mode of payment made/received? Submit the details.
- Please state whether you are buying/selling Bitcoins and other cryptocurrencies in cash by making peer to peer transfer? If yes, submit the details of payments made/received. Also provide details of the buyer and seller along with his public ID on blockchain/wallet number.
- Please state whether you are buying/selling Bitcoins and other cryptocurrencies in cash from any platform? Submit the details of transfer along with the details of the platform.
- Whether you have invested in mining of Bitcoins or any other cryptocurrency? If yes, submit the following details.
a. Whether you yourself is involved in mining by investing in own physical setup?
b. Whether you have invested in cloud mining, hash mining?
c. Details of the total investment in mining, financial year wise.
d. Details of reward fees earned by mining of Bitcoins and other cryptocurrencies, Financial year wise.
e. Details of the mining companies you have invested into along with the details of reward fees earned financial year wise.
f. Furnish the detailed ledger of profits earned from mining of Bitcoins and other cryptocurrencies. - Details of investment/sales of Bitcoins and other cryptocurrencies in India and abroad during 8.11.2016 to 31.12.2016.
- Have you received any Bitcoins/cryptocurrency in lieu of any sales made/services rendered within India. Please furnishing the details of such transactions along with the details of the person making such payments and his wallet/blockchain public ID details.
- Have you received any Bitcoins/cryptocurrency in lieu of any sales made/services rendered/exports made outside India. Please furnish the details of such transactions along with the details of the person making such payments and his wallet/blockchain public ID details.
Look at these points and it does feel like a harassment but this doesn't come as a surprise to me at all. India is not the easiest place to do business. There's a lot of red-tape and bureaucracy.
Be sure to read my guide on filing your returns if you have any gains from Bitcoins/cryptocurrencies.
If you consider taxation of cryptos as theft, India has arrived at the scene!
The change in our government hasn't made a major difference to curbing black money. India has a very closed, restrictive banking system with hard rules and strict implementation, especially concerning areas such as money laundering. Sending money abroad is a complex and complicated matter usually. However, demonetisation did nothing to reduce or prevent black money from being laundered out of the country.
The government on one hand cautions it's citizens from using Bitcoin, on the other all our exchanges have a free hand at operating the way they want to.
Basically, the Indian government now views cryptos has a great new source of income to line up it's pockets. Taxing users heavily and demanding to know every single detail and transactions made in Indian or foreign cryptocurrency exchanges seems to be it's only solution, instead of legalising Bitcoin and alt-coins.
Hopefully they will build a framework in the year to come and make it easier for all crypto investors from India to participate in this space instead of creating ambiguity in taxation, confusion and forcing users to pay up without creating a friendly atmosphere to trade.
It's still too early to say as to what is going to happen in this space but the cryptocurrency space is just booming in India and rest assured, it isn't going to fade anytime soon!
If you like my work kindly resteem it to your friends. You may also continue reading my recent posts which might interest you:
- Steemit Mentioned In: How to File Tax Returns in India for Your Bitcoin Profits—My Latest Feature In TheQuint!
- 4 Tips For Steemit Account Recovery & Wallet Security!
- Steemit.Chat Contest #10 + Contest #9 Winners Announcement!