The Income Tax department of India has issued notices to 400K-500K HNIs indulged in Bitcoin trading under the annexure to summon under Section 131 of the Income Tax Act. The IT department issued these notices to understand the sources of their income in order to link the same with their gains in Bitcoin trading.
As per the notice, reviewed by Inc42, the Bitcoin traders have been asked to attend the office of the IT department to produce the books of accounts or the documents including – details of investments done by the traders during FY 2015-16, 2016-17 and 2017-18 along with supporting documents.
The Bitcoin traders have also been asked to provide the bank statements of all the bank accounts maintained by the HNIs personally, their family members and concerns associated with them.
Apart from this, they have to submit the computation of gain/loss arise out of investments done during the above mentioned period.
The notice also mentions that – in case, the person misses to attend or submit evidence or to produce the books of accounts or documents, a penalty of INR 10,000 will be imposed under setion 272 A(1)(C) of the Income Tax Act, 1961.
As per a Mint report, the department is looking details of bitcoin investments done during the demonetisation period i.e. November to December 2016.