Indian Taxman Knows a lot About Cryptocurrencies

_{Image sourced from Quagmire Consulting - A tax consultancy firm serving the niche of crypto-taxation}

Although blockchain and cryptocurrency space isn't yet regulated by the Indian Government and there isn't any clarity in tax legislation surrounding this field, don't think that Indian tax authorities are a novice in this field.

The first training session on blockchain and cryptocurrencies and their legality in Indian context for senior police officials is scheduled in September first week at Hyderabad. But perhaps Tax department didn't need any such formal training process to catch up on this new tech.

Today I just chanced upon a copy of a summon sent by the Income Tax Department to an Income Tax assessee of a State as small as Chhattisgarh. CA Anoush Bhasin, the founder of South Delhi based Quagmire Consulting tweeted the following picture
_{(originally tweeted by indiabits21 group)}:

What amazed me about it was the "Annexure - A" of this Summon that contains about 26 detailed questions related to Bitcoin, other cryptocurrencies, funds held at national and foreign crypto-exchanges, localbitcoins.com, hardware wallet's Public ID / Wallet no., mining activities (including cloud & hash mining) etc.

No doubt, this is a very detailed query and was summoned under Section 131 -1(A) of the IT Act. This is a very important notice that can't be taken lightly and if not responded properly, the investigative officer can issue a Search & Seizure notice u/s 132 commonly referred as "income tax raid".

Cryptocurrencies in India is not illegal at this time. But the absence of regulation shouldn't be an argument to not to pay your taxes on it. Existing Income Tax laws are more than sufficient to deal with crypto and related asset class. Income accrued from any source whether legal or illegal is liable for taxation in India.

The deadline for paying your taxes for previous financial year is 30^th August, 2019.

• Are you paying your taxes on your crypto income?