Widening its probe on possible tax evasion and money laundering, India’s income tax department is set to issue notices to 4-5 lakh high net-worth individuals (HNIs) who were involved in trading of unregulated digital currency. The development comes few days after the tax department conducted a survey of major exchanges across the country.
During the survey operation by the tax department, officials have found that around 20 lakh entities are registered on these exchanges, out of which 4-5 lakh were found to be operational. The department will now first seek their financial details and then go in for establishing the tax incidences, if any. As cryptocurrencies are illegal and not regulated, the I-T office has taken action as per existing provisions. The I-T department has also shared information with eight other wings of the department across the country for a much detailed probe.
A senior official in the knowledge of the operation said: “Those individuals and entities whose records were recovered by the department are now being probed under tax evasion charges. Notices are being issued and they will have to pay capital gains tax on the bitcoin investments and trade.”
Most of the bitcoin exchanges in India have to comply with the strict KYC and AML laws, in which users need to provide PAN card, Aadhar Card and Bank account details which they are compelled to share with I-T department in case of any scrutiny. Investors and traders are advised to seek professional help to avoid such cases as not enough clarity on the subject are available.