Recently in India, tens of thousands of cryptocurrency investors have received notifications from tax authorities demanding payment of tax or similar levy on profits originating from bitcoin trade.
According to recent reports, the Tax Department of India has collected information from nine national currency exchanges. This study showed that more than USD $3.5 billion was received as a result of transactions from trading in alternative assets over the past 17 months. However, few investors included data received from the profit in their tax report.
As a result, the Tax Department of India sent tax notices to people dealing in Bitcoin and other major virtual currencies demanding they pay tax on capital gains. Tax authorities also asked traders for information on their total portfolio of crypto-currencies and the source of the income.
As reported by Reuters, this news caught most investors by surprise, since there is currently no government developed policy on cryptocurrency in India.