India’s Taxman Put Bitcoiners on the Hot Seat as Bitcoin Price Keeps Surging
The Central Board of Direct Taxes (CBDT), the authority in charge of taxation in India, is now gathering information about bitcoin (BTC) trades executed via banks in the state and it’s also monitoring the earnings of traders on KYC-compliant exchanges. Sources close to the matter have hinted that the nation may be making plans to formulate clear cut taxation guidelines for crypto investors.
India’s Taxman Gets Serious with Crypto Traders
As the price of bitcoin (BTC) and altcoins continue to “moon,” India’s tax agency, the Central Board of Direct Taxes (CBDT) is reportedly making active plans to clip the wings of crypto tax evaders in the country.
Per sources close to the latest development, the nation’s Income Tax Department has obtained the transaction history of crypto traders that executed trades via banking channels prior to the apex bank’s ban on fiat-to-crypto trading in 2018.
While crypto taxation is yet to become a thing in various jurisdictions across the globe, as authorities continue to look for ways of making crypto investors file the correct taxes on their bitcoin trading gains, Naimish Sanghvi, a top Indian crypto influencer has taken to Twitter to reveal that bitcoiners in the state have been paying taxes on their crypto profits contrary to reports.
The CBDT to Add more Clarity?
Notably, there are no clear-cut guidelines as regards crypto taxation in India, even though some traders may have been paying taxes from the profits generated from their trading activities, as revealed by Naimish Sanghvi.
Against that backdrop, some observers have argued that the taxman may be looking to formulate specific tax laws for its cryptospace. Twitter user @king_ogboi tweeted:
Umm..I disagree..That means India plans to add provisions in its tax laws specifically related to crypto. Earlier everything was according to one's judgement as to head of income, treatment etc without any clarity from tax department.
— OG Boi (@king_ogboi) December 7, 2020
In the same vein, some experts, including Amit Maheshwari, a partner at Indian tax and consulting firm AMK Global have predicted that the taxman could categorize active bitcoin trading as a speculative business and therefore slap normal tax rates on it.
While nobody knows for sure how the tax agency plans to treat bitcoin and other cryptos, the fact remains that introducing clear and non-draconian tax laws will definitely boost the confidence of bitcoin traders and further legitimize the business in the country, especially at a time when the growth of India’s crypto industry is being crippled by regulatory uncertainties,
