Amidst the crypto craze, India was one of the countries that embraced virtual currency the most. It felt as if everyone was investing. That said, with the beginning of a new year the Indian income tax department in coming down hard on investors that gained all their earnings via cryptocurrencies and neglected to pay any taxes. As of today, notices have been issued to 100,000 investors across the country.
Sushil Chandra, the chairman of the Central Board of Direct Taxes has stated, “We found out that there is no clarity on investments made by many people, which means 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,”
In charge of analyzing the source of where the money invested in cryptocurrencies has come from will the I-T department. If they cannot find an origin, the individual being inspected will be charged with tax scrutiny.
In December of last year, tax officials began surveying cryptocurrency exchanges across the country. They have been gathering transaction and investor data. At the moment the focus is only on investors who made huge profits. That said, they have estimated they will be looking into 500,000 individuals.
The expected numbers are due to the amount of exchanges in the country and the amount of people investing. Currently there are 10 cryptocurrency exchanges and about five million users. The monthly volumes hit $1.5 billion in India.
The Indian income tax department’s crackdown comes only a few days after the government has announced that it will place harsher restrictions on the cryptocurrency ecosystem before the end of the financial year. This is being decided upon and looked into by a committee made up of officials from the central bank, the finance ministry and the market regulators Securities and Exchanges Board of India.