India’s Income Tax department is planning to issue notices high networking individuals (HNI) trading cryptocurrencies in the country.
The notices will seek their relevant financial details and establish tax demand, a senior official privy to the operation told PTI.
After conducting surveys at exchanges last week, the agency found that 20 lakh entities registered on these exchanges and 4 to 5 were operational and transactional and investing. However, the surveys were done to investigate tax evasion issues.
The official said,
“Those individuals and entities whose records were recovering by the department are now being probes under tax evasion charges. Notices are issuing and they will have to pay capital gains tax on the bitcoin investments and trade”.
Related Coverage: India income tax department conducts inspection on Bitcoin exchanges
Cryptocurrencies as well as cryptocurrency trading is illegal in the country. The country’s finance ministry formed an inter-disciplinary committee in March, which prepared a report suggesting how to deal with cryptocurrencies. However, the report is being inspect.
The Income Tax Act in India permits tax officials to make a surprise visit to the business premises.
India, which has a problem with black money, has been cracking down on illegal money since last year. The government moved to making some changes to usage of national currency denomination in an attempt to end black money.