The Central Board of Direct Taxes(CBDT) in India issued a notice to up to 100,000 investors to pay their gain taxes on crypto investment or face strict action. This move was made after CFTC chairman Christopher Giancarlos favoured bitcoin in the Congressional hearing yesterday and Jaitley’s remark on cryptocurrencies a few days back.
Tax notice sent to 100,000 crypto investors
It has been just yesterday that CFTC Chairman Christopher Giancarlos became a hot topic among the crypto community with his positive remarks over the cryptocurrencies and ICOs.
A media source quoted Sushil Chandra, the chairman of Central Board of Direct Taxes (CBDT), saying:
“Those who have earned from bitcoin would have to give tax. Their source of income would also be asked and if they don’t pay tax, action will be taken against them.”
According to him, up to 100,000 such investors have been issued the notices.
With the bitcoin prices constantly plunging, the warning issued by CBDT for crypto investors to be ready to face action in case there are any hidden earnings from cryptocurrencies added to the panic among the Indians.
Today, the bitcoin prices gained momentum and recovered a lot of its value by rising about 25 percent at USD 8,100 after hitting its three months lowest at USD 6,000 yesterday. This hike in price came after the US Senate Committee’s meeting with the Chairmans of SEC and CFTC. Christopher Giancarlos, SEC chief testified in the favour of bitcoin among other cryptocurrencies and asked the Congress to consider the interest of young investors.
Now, Taxman wants a piece of $3,5 billion crypto market
Last month it has been revealed that about $3.5 billion worth of transactions have taken place over 17 months period. It has been estimated that 2 lakh investors are to be added every month to the Indian cryptocurrency industry. With the high earning potential of this market, now the taxman also wants a piece of it.
According to Sushil Chandra, the IT department has issued the notice to about one lakh people who have invested in bitcoin among other cryptocurrencies but haven’t declared their income tax returns.
This move came just a few days after the Finance Minister, Arun Jaitley declared in his Union Budget that cryptocurrencies are not a legal tender. Also, governments over the globe are struggling with how exactly to regulate the crypto trading.
“We found out that there is no clarity on investments made by many people which means that they have not declared it properly. We have informed all the DGs (Director Generals of Income Tax) across India, they are issuing notices and so that would be taxed.”
It would be interesting to see what effect this will have on the cryptocurrency market. Would it discourage people from investing in cryptos? Seems unlikely! Let us know your thoughts in our comment section below!