According to information shared by IndiaBits – a group of Bitcoin enthusiasts – the Income Tax Department has started sending notices to Indian cryptocurrency traders and investors. IndiaBits shared a detailed three-page document on Twitter outlining the details of the notice.
Despite the perceived lack of understanding around cryptocurrencies among Indian regulators, the Income Tax notices are proof that tax officials understand the mechanics of cryptocurrencies. According to crypto taxation expert Anoush Bhasin, the notice should not be taken lightly and the current income tax laws are sufficient to deal with crypto assets. In fact, Anoush has put out a detailed tweet thread with his take on the tax notices:
Moreover, according to Blockchain Lawyer Varun Sethi, the tax notice looks similar to the one issued back in 2018. Varun had written a blog detailing the information income tax officers are seeking from crypto traders. We highly encourage you to read Varun’s article.
Notably, the Income Tax Department had published a cryptocurrency guide for inter-departmental use last year, but not made it available to the public.
This brings to the most important question again – If India wants to ban cryptocurrencies, why does the government want to tax crypto gains? Wouldn’t it be better to regulate cryptocurrencies and bring this asset class under the tax ambit in a more structured fashion?
(Image Credit: IndiaBits)