The officials of India’s tax department have revealed to reporters that citizens of the nation had taken part in transactions worth over $3.5 billion in the last 17 months. These were investments related to cryptocoins such as Ethereum, Bitcoin, and Ripple. The sleuths began their survey in mid-December when they paid visits to various exchanges. They were able to collect information related to identity, bank accounts, and many others. At the time, the government said it was interested in checking for money laundering efforts. After just a day of the surveys, the authorities confirmed they would be seeking to collect taxes.
What it Will Do With the Data
After collecting data and confirming the identities of various people, the authorities have sent notices to tens of thousands of people who have invested in digital coins. In the notice, they have been asked to file taxes on capital gains. Besides this, they will be required to provide details on their total holdings and the source of their funds. According to the Director General of the investigation, B.R Balakrishnan:
We found that investors were not reflecting it on their tax returns and in many cases, the investment was not accounted for.
The Government’s Official Stance
The Indian government has no clear stance on cryptocoins. Despite this, the adoption of these coins has been quite significant in India. Self-regulated exchanges, which follow KYC rules, add about 200 thousand new users every month. This is despite repeated warnings from the central bank against investing in these digital currencies. Thus far, there are two petitions in court to bring clarity to the issue. There is even one at the Supreme Court calling for India’s government to create a regulatory framework.
A cybercrime lawyer suggested that the government should grant some kind of legality to ensure that criminals cannot use them. He said that this was especially important, considering that digital currencies were here for good. The Indian government is working on developing a framework to regulate crypto coins. However, the Indian tax authorities were not keen on waiting for any regulation as they push ahead to collect taxes. For them, it would be a mistake to ignore unpaid taxes until the government rules on the legality of the issue.
India’s Attitude to Digital Currencies
The latest action to collect tax should not be seen as opposition to digital coins. In fact, the state of Andhra Pradesh in India has made numerous efforts to explore uses for blockchain tech. They recently announced a new deal with a local fund firm. The state signed an M.o.U. with Covalent Fund to a blockchain ecosystem.
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