Income Tax dept asks cryptocurrency exchanges for info on crypto trades


The Income Tax Department new action is on cryptocurrencies investors. It will surely increase the concerns of investors in India at this time when most cryptocurrency have lost value owing to ongoing decline. To tax the profits generated during the bull run, the income tax department has requested trading information from all crypto exchanges in India.

According to sources, the tax department had issued notices to three exchanges requiring all ledger entries in order to investigate the price, timing, and amount of digital currencies traded by the exchanges.

Although this is not the first time the department has requested for such information from exchanges. In 2017, when Bitcoin hit an all-time high, similar notices were issued.

Read Also: Cryptocurrency status in India: Past, Present and Future

As the income tax department has gone faceless, it has become a regular work to check if everything is ok, specially online.

The income tax department has also requested information such as the exchange’s financials, but the main aim seems to verify the details of traders because the department already has information on exchanges.

Unlike the stock market, where transactions are made through intermediaries, cryptocurrency buy and sell orders are issued directly on the exchange platform, making exchanges the only source of such data.

Cryptocurrency traders are not permitted to withdraw funds and deposit the earnings into their bank accounts in order to buy when prices fall. It’s possible that some earnings may go untaxed as a result of this.

Read Also: Should you invest in Gold by ETFs rather than physical gold to build wealth?

Since digital assets are not designated as “securities” under the [Securities Contracts (Regulation) Act], tax on the sale of crytocurrency is charged at the full tax rate.

While the current volatility in the pricing of cryptocurrency has affected many cryptocurrency traders, others profited last year when the Supreme Court’s decision to overturn the Reserve Bank of India’s (RBI) 2018 direction launched a bull run. The central bank ordered banks not to deal in digital currencies or promote the trade of such assets through its systems in its April 2018 directive.

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