MUMBAI: Crypto currencies appear to be living up to their cryptic reputation. Days after the income tax department issued about 5 lakh notices to high net-worth individuals (HNIs) who own bitcoins or any other crypto currency, investors are drafting replies that would show they have no dues to the authorities. On its part, the income tax department may also find it difficult to figure out whether wealthy investors actually hold any bitcoins, or the income. earned from these instruments. The department may also struggle to calculate the capital gains tax on bitcoins as investors have used complex investment strategies. Some also claim that they have never bought any crypto currency, or that their accounts may have been hacked a few years ago.
“The tax department is investigating the source of income and whether money invested in bitcoins or any other crypto currency is from money laundering,” a senior official in the know told ET. ” For the moment, those receiving notices are busy with their response to the authorities. A 37 year old technology executive from Banguluru, also a bitcoin investor, has heard from the taxmen.
