Bitcoin investors in tight spot as I-T department issues one lakh notices

The Indian Income Tax Department has issued about one lakh notices to people who have invested in cryptocurrencies, like Bitcoin, and have not declared these in their income tax returns, a top official said on Tuesday. The revelation by Central Board of Direct Taxes (CBDT) Chairman Sushil Chandra at an Assocham event in the capital comes at a time when virtual currencies’ values have been tumbling on worries about government regulation. "People who have made investments [in cryptocurrencies] and have not declared income while filing taxes, and have not paid tax on the profit earned by investing, we are sending them notices as we feel that it is all taxable," he said at an Assocham postBudget seminar. According to Chandra, the Income Tax (IT) Department had conducted various surveys on cryptocurrency exchanges to understand how many people were regular contributors, how many had registered themselves and how many have traded on exchanges. "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," he added.

In early trade on Tuesday, Bitcoin reportedly fell, to its lowest since November, to $5,992 in the Hong Kong market. In India, Bitcoins have been trading at over Rs 10 lakh each, with people investing amounts ranging from Rs. 3,000 to several lakhs of rupees. In late December, cryptocurrency dealer Pluto Exchange announced the launch of India's first mobile application that enables transacting in virtual currencies.