1 lakh Income Tax notices sent to Bitcoin investors
According to investigation agencies, with the demand and price of cryptocurrencies on the rise, cyber criminals have found innovative ways to dupe those looking to invest
The Indian Income Tax Department has issued about one lakh notices to people who have invested in cryptocurrencies like Bitcoin without declaring these in their income tax returns, a top official said on Tuesday.
The revelation by Central Board of Direct Taxes (CBDT) Chairman Sushil Chandra at an Assocham event here comes at a time when virtual currencies values have been tumbling on worries about government regulation. Bitcoin fell to its lowest since November at $5,992 in the Hong Kong market in early trade on Tuesday.
"People who have made investments (in cryptocurrencies) and have not declared income while filing taxes, and have not paid tax on the profit earned by investing, we are sending them notices as we feel that it is all taxable," he said at an Assocham organised post-Budget seminar here.
According to Chandra, the Income Tax Department had conducted various surveys on cryptocurrency exchanges to understand how many people are regular contributors, how many had registered themselves and how many have traded on exchanges. "We found out that there is no clarity on investments made by many people which means that they have not declared it properly.
"We have informed all the DGs (Director Generals of Income Tax) across India, they are issuing notices and so that would be taxed," he added. He also said that as per income tax laws, money invested in virtual currencies would be taxable if the source is unexplained. Moreover, the profit gained on such investments is taxable.
"So we will tax that particular amount and they should pay tax on that," Chandra added. In December last, the Indian government sounded the alarm on the phenomenon of cryptocurrencies, comparing them with the notorious Ponzi schemes floated to dupe gullible investors.
A Finance Ministry statement said that as virtual currencies were not backed by assets, their prices are entirely a "matter of mere speculation". "Consumers need to be alert and extremely cautious as to avoid getting trapped in such Ponzi schemes," it said. It clarified that cryptocurrencies are not legal tender and do not have any regulatory permission or protection in India.
"The Government or Reserve Bank of India has not authorised any virtual currencies as a medium of exchange. Further, the government or any other regulator in India has not given license to any agency for working as exchange or any other kind of intermediary for any virtual currency," the statement said.
According to investigation agencies, with the demand and price of cryptocurrencies on the rise, cyber criminals have found innovative ways to dupe those looking to invest. Bitcoins in India have been trading at more than Rs 10 lakh each, while people are investing amounts ranging from Rs 3,000 to several lakhs of rupees.
Bitcoin values in New York, for instance, have soared nearly 1,600 per cent over the past year and have gone upwards of $15,000. In December, cryptocurrency dealer Pluto Exchange announced the launch of India's first mobile application for transacting in virtual currencies.
The content/reporting displayed on our website www.mid-day.com is provided "AS-IS," "AS AVAILABLE, by us from third party, agencies, sources, without any verification from our side. It may contain error, bugs and other limitations. The reader's can rely on the content at their own will. Mid-day accepts no responsibility or liability for its dependability, trustworthiness, reliability, data, text, images, video, messages, or any other material whatsoever or for any claims/loss/action that the reader may suffer as a result of relying on the content on our site. Mid-day management/mid-day.com reserves the sole right to alter, delete or remove (without notice) the content in its absolute discretion for any reason whatsoever.
DISCLAIMER: mid-day and its affiliates shall have no liability for any views, thoughts and comments expressed on this article.
Martyn Ford fitness secrets