Made a fortune in bitcoins? You may soon be taxed

Jon Howard
December 15, 2017

Bitcoin's explosive growth in the past couple of days has grabbed the attention of Indian Income Tax Department, which carried out "surveys" at nine major bitcoin exchanges across the country on Wednesday in a major crackdown.

Thousands of transactions are taking place every day in unregulated cryptocurrency exchanges and the Income Tax Department has launched surveys in the cities of Delhi, Mumbai, Pune, Bengaluru and Hyderabad, spokeswoman Surbhi Ahluwalia said. Other members of the panel include Securities and Exchange Board of India Chairman Ajay Tyagi and Reserve Bank of India's Deputy Governor B.P. Kanungo, the people said, asking not to be identified as the decision was not public. The raid was conducted because of alleged tax evasion by exchange customers, the Press Trust of India (PTI) reported.

The central banks are in a great concern over this issue.

The survey was conducted under the Section 133A of the Indian Income Tax Act and the department officials familiar with the matter said that the search was conducted to recover information of the cryptocurrency investors, their emails, registered and linked bank accounts, and other similar data.

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The Income Tax Department has come down heavily on major Bitcoin exchanges in India. "However, the operations are still on and final findings will emerge later", a senior official was quoted as saying.

Bitcoin, widely believed to have been invented by a person or a group named Satoshi Nakamoto, can be mined by anybody who has computing skills, though mining it is becoming hard by the day. Unlike government-controlled money, which can be inflated, the supply of Bitcoins is limited to 21 millions, and this cannot be changed. It's not controlled by any country but is accepted in Japan as legal tender while in Switzerland it can be used to pay taxes and in Canada futures trading in BTC has been permitted now. And since there is neither a licensing, nor regulation, miscreants can always fool gullible investors and dupe them of their funds. He said: "Our current position on bitcoins is that we will not be using it for any payments and settlements...though the technology underlying cryptocurrencies will not end".

Crypto-currency Bitcoin is in news for the past one week as it hit new highs nearly every day. Investors are going by past returns, without realising the risks ahead.

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