India’s income tax (IT) department is taking a closer look at the overall wealth of individuals making gains in bitcoin trading through exchanges.
After outlining their intent to collect taxes from bitcoin adopters raking in profits from this year’s soaring gains, India’s official tax authority will reportedly zero in on certain individuals’ overall wealth when investigating their bitcoin profits.
For context, the IT department visited nine major bitcoin exchanges across the country on December 13 to conduct ‘survey operations’ wherein the identity of traders and investors and their transactions, related bank accounts and more were gathered. “The officials had requested data to try and analyse taxability of Bitcoin,” revealed Coinsecure, a bitcoin exchange based in India’s capital New Delhi. “Everything was extremely routine and all exchanges in India have gone through the same process cooperating and coordinating with the authorities.”
Now, India’s tax authority is putting its lens over on a select group of individuals who have profited the most from bitcoin’s soaring gains this year, using the data collected from its ‘surveys’ to check into individuals’ assets beyond bitcoin.
“So, apart from bitcoin or other currencies, all the mobile and immobile properties of an individual who has made significant gains in cryptocurrencies will be under scrutiny,” revealed Sathvik Vishwanath, CEO of Bangalore-based exchange Unocoin, speaking to Quartz.
The publication also cited an anonymous official from a separate cryptocurrency exchange who said the IT department mentioned the possibility of checking into other assets bought off of the profits made from bitcoin’s gains.
According to the report, it’ll be the top percentile of bitcoin profiteers, by highest gains, who will come under the tax department’s focus.
A lawyer who sees a handful of Indian bitcoin exchanges as clients told Quartz:
The top people who have made maximum gains are the ones who are going to be under the scanner. That’s because the number of people showing gains on these virtual currencies is miniscule.
Last week, a senior tax official said as many as 400,000-500,000 bitcoin adopters are set to receive notices wherein “they will have to pay capital gains tax on the bitcoin investments and trade.”
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Last modified: May 21, 2020 11:22 AM UTC