Bitcoin Forum

What are your thoughts about the recent surveys conducted by the I-T department at Bitcoin exchanges across the country.  Do you see it as an attempt by the authorities to exercise unnecessary control and undermine the free spirit of Bitcoin.

I would say its good move , the companies has proper registration and validation will not have to worry , as IT dept. looking for Black money holders who parking huge amount of money in BTC to hide it , they scrutinize exchange that's good , catch the culprits who evading tax and clean the rest . Its their Job to find out the tax evaders so they did raid , in my opinion there nothing to worry about if you are clean and filing return for your investments .

The surveys were conducted to know the current status of funds underlying with exchanges in the form of btc deposits and fiat. It was just a pre-course for upcoming btc taxation policy and shouldn't be consider as unnecessary control.
Government has cleared its intention that Bitcoin will be consider as Intangible Asset (not money). So as in case, Bitcoin is subject to two types of taxation:
1. Capital Gains: People who made gains due to btc rise have to pay taxes on their gains.
2. Business Taxes: Companies doing business with Bitcoin as their main asset have to pay taxes.

So there is nothing to be fear. It has turned necessary to have a check and taxation on Bitcoin. We have heard a Money Laundering case from an owner of big Indian Exchange few years ago. There maybe more cases!

i think it will fall under capital gain , as described by cleartax

Capital Gain isn't the only possibility of taxation of Bitcoin in India. The Cleartax article you referring to includes more cases of taxation such as,

• Bitcoin profits from mining: This is considered as self-generated asset but since there is no provision under existing law (Schedule 55) of self-generated asset about Bitcoin so no tax will be levied on it.
• Bitcoin earning for Services and Goods: Bitcoin profits or earnings from selling goods and services will be considered as Income and Income Tax instead Capital Gain tax will be levied on it.

Other than above two cases, Business taxation will be third case as discussed in my previous post.
So Captial Gains isn't the only case.

Income tax department has conducted a survey in 9 exchanges in India, Major reason which I can see behind this action is to collect the accurate data related to BTC trading and to recognize its user base. There is nothing to fear or panic from it as Govt of India is trying to evaluate BTC economy through these survey so that they can form a regulatory law in INDIA.

In today's newspaper I read that Income Tax department is going to send notices to 4-5 lakh high level traders who have traded Bitcoins at popular exchanges.
http://www.businesstoday.in/current/economy-politics/bitcoin-income-tax-notices-4-lakh-hnis-tax-evasion-cryptocurrency-digital-money-tax-fraud/story/266264.html

This comes after IT officials conducted surveys at 9 popular Bitcoin exchanges in India last week.

Let us know if anyone here receives the notice  :P

Now this scary news and seems like all Indian exchanges having this panic right now and price decreasing rapidly compared to International exchange price getting dropped in Indian exchanges .

I don't think the price decline is because of this news. Prices on Indian exchanges have always wandered around Bitstamp price, with USD to INR ratio being 70.
Currently Coinsecure INR 13,00,000 = Bitstamp USD 18,400 which is same as usual.

I don't think there is nothing to worry as it is a regular IT department activity to understand the BTC investment in India. Moreover, people who use BTC to convert their black money into BTC are in big trouble as IT department issues notice to many BTC investors in banglore.

It must be an routine process. Bangalore based startups are also reported investigated . I don't think it will/ can affect the real big players. As usual only small, mid-level traders who use Indian exchanges may be monitored.

If you're paying taxes on your crypto earnings, you should be fine.

and if your source of income invested in crypto is explainable, you should be fine.

So how many people have received tax notice from the IT dept and do we have anyone reporting here the details of it?

Its Govt. notice should take some time to reach :P

Dont think Indian price always wandered around Bitstamp cause International Bitcoin price never reached 20k $ + [21k $ @ 68 INR per USD] but Indian price were 2 - 3 days ego .

People have received notices as per the Hindu. Who is HNI in this context? Who is "active" trader?

I happened to see one of the notices, sent to a trader. Not sure who, but I heard that this was on some traders group on whatsapp.
Noticed 28 or so questions on it, mainly regarding assets, crypto, public keys where other crypto is held, explanation of how purchased, etc.

Lots of requests on Coinsecure for audit reports and details of transactions from users themselves, so I do think this is quite widespread.

Thanks for the update. As per you, what seems to be the profile of the person getting the notice?
Who is HNI?
Who is "large volume" or "active" trader?
If a person buys BTC in 2017 and does not sell in currency is he liable to get a notice?

As far as I have heard is that govt is considering HNI who ever in 2017 have bought btc worth over 1lac till now.  So I think majorly they will want the tax to be paid on the profits earned since people who had invested before 3-4 months and by now if they hold would have made good profits. So tax notice would be sent to them.

Investing is not a taxable event. Selling for rupees is a taxable event. What if someone purchased in current tax year (after April 2017) and did not sell? How does he have tax liability and why would he receive notice for tax evasion?
May I ask the source of this information?

I found this on twitter:
https://twitter.com/deepunomics/status/950659536146268161

https://i.imgur.com/yTLbYcb.jpg

बड़ा ही लम्बा चौड़ा सवालों का पिटारा है. अगर एक एक BTC या ऐसे किसी क्रिप्टो-करेंसी इन्वेस्टर से ऐसे सवाल किया जाए तो शायद डिपार्टमेंट में कम से कम १०० नए Vacant पोस्ट का विज्ञापन जल्द ही अखबार में होगा. लेकिन, इस थ्रेड में एक सवाल बड़ा ही शानदार था : तब क्या हो अगर किसी ने क्रिप्टो करेंसी में किसी दो फाइनेंसियल इयर में होल्ड किया हुआ हो, उसके रिटर्न्स की गड़ना कैसे होगी?

I'm assuming the profits (and hence tax) will be calculated only when you convert your crypto holdings to fiat. You don't need to report any profits or tax as far as you keep holding crypto (just like capital assets). This is what my understanding is.

There is no need to worry for people who are paying taxes on the earnings through BTC. If you are doing big transactions and try to avoid paying taxes, then it can be a huge problem.

This is being done to catch big fishes. Small investors who are going to file all their income tax returns on time need not worry about this at all.