India targets cryptocurrency users

The government has sent tax notices to tens of thousands of people dealing in cryptocurrencies, after a nationwide survey showed more than $3.5 billion worth of transactions have been conducted over a 17-month period, Reuters reported on Friday. Tech-savvy young investors, real estate players and jewellers are among those dabbling in bitcoin and other virtual currencies (VCs), tax officials told the news agency after gathering data from nine exchanges in Mumbai, Delhi, Bengaluru and Pune. B.R. Balakrishnan, a director general of investigations at the Income Tax Department in the southern state of Karnataka, said notices were sent following the survey to assess the penetration and patterns of VC trade. The IT-D has asked people playing in bitcoin and other VCs, like ethereum and ripple, to pay tax on capital gains. Officials have also asked for details about those investors total holdings and the source of funds, in the tax notice seen by the news agency. “We cannot turn a blind eye. It would have been disastrous to wait until the final verdict was out on its legality,” he told Reuters. “We found that investors were not reflecting it on their tax returns and in many cases, the investment was not accounted for,” Balakrishnan added. Tax inspectors reportedly sought help from blockchain experts to conduct the survey. Officials also participated in the trade to identify loopholes.