The Income Tax department has asked bitcoin bearer to reveal details of bitcoins or other crypto-currency transactions. The income tax notices were issued to 4-5 lakh high net worth individuals under the annexure to summon
The IT department has particularly demanded information of investment and sales of bitcoins and other crypto-currencies in India and outside the country between 1st November 2016 and 31st December 2016.
Beside from details on the period of dealing with crypto-currencies, the Income Tax notice finds information on the source of income for the initial investment. The tax department also wants to inquire in which bitcoin or crypto-currency exchanges, in India and outside the country, does a holder have accounts.
“You as a bitcoin or crypto-currency holder will have to provide details of all the wallets you are using along with your Unique ID number. The department also wants to know whether you are using physical hardware wallet for storing your bitcoins and other cryptocurrencies,” says the I-T notice. A bitcoin bearer will also have to provide balance as on date along with public ID on the blockchain account, the notice added.
The tax authorities also want to know what was the mode of payment for receiving money out of bitcoin or crypto-currency sales from websites registered out of India. “You have to give information of total purchase and sales of bitcoins and other crypto-currencies from websites registered out of India.
You also have to state whether you are buying or selling crypto-currencies in cash by making peer to peer transfer. If you are then you have to submit the information of payments made and received along with details of the buyer and seller with his or her public IS,” said the notification.
In case a bitcoin holder has made cash transaction for crypto-currencies on exchanges, he has to submit information of transfer along with details of the platforms. In case the bearer is involved in bitcoin mining, he has to give information on “whether you yourself are involved in mining by investing in own physical set up, whether you have invested in cloud mining a hash mining, details of the total investment in mining financial year wise, details of reward fees earned by mining of bitcoins or other cryptocurrencies in a financial year and details of mining companies you have invested into along with the details of reward fees earned financial year wise”.
If a bearer has received any bitcoins or crypto-currencies for any service or sales in India or outside the country, the tax department wants to know the information of that transaction with details of the person making the transaction along with the public identity.