India’s income tax department has sent out notices to thousands of people that are dealing in cryptocurrency. The department learned that $3.5 billion worth of transactions have been conducted over a 17-month period, and is now moving to collect taxes on those transactions.
According to Reuters, the move comes as India’s finance ministry works with regulations for virtual currencies, which are attracting around 200,000 users and bringing around 20 billion Indian rupees ($315 million) worth of trade every month. For what it’s worth, Indian government has been issuing constant warnings labeling digital currency investments as “Ponzi schemes.” This is because of backdrop of police complaints from hundreds of investors of fraudulent transactions.
Indian government’s tax department is now reaching out to cryptocurrency investors to pay tax on capital gains. They’re also enquiring about their total holdings and sources for funding. Indian is worried about its citizens trading on offshore exchanges, much like China before it.
Apart from India, late last month, South Korea enacted new legislation for monitoring exchanges and banned the creation of anonymous cryptocurrency accounts. In the United States, digital currency exchange Coinbase cried foul after a California court ordered them to share the financial records of over 14,000 users with the IRS for tax purposes.
