India’s Biggest Tax Filing Platform is Helping Investors File on Bitcoin Gains
A new partnership between major cryptocurrency exchange Zebpay and tax filing platform Cleartax aims to assist cryptocurrency investors file taxes on capital gains from their crypto assets.
As Indian authorities continue to be perfectly ambiguous over guidelines or regulations for cryptocurrency adopters and the industry respectively – bitcoin and cryptocurrencies are neither legal nor illegal, nor regulated in India – the country’s official taxation department is perfectly clear on its foray to collect taxes from individuals in the country.
For context, India’s income tax (IT) department visited at least nine major exchanges across the country in a coordinated operation in December to conduct ‘surveys’ to gather data of KYC-adhering traders’ and investors’ transactions, bank accounts and more.
A recent report had tax officials point to a total of $3.5 billion in transactions and investments by Indian citizens during a 17-month period up to 2018. As a result, the IT department has reportedly sent out notices to “tens of thousands” of investors, reminding them to file their taxes on profits gained from their crypto earnings. Other reports have suggested that the IT department is to issue notices to up to 500,000 investors across the country.
However, a startling lack of any tax filing guidelines, norms or instructions by the taxation authority has only added to the confusion, leaving investors unsure about declaring their holdings in a tax return or pay taxes on capital gains.
A new partnership between India’s largest tax-filing platform, Cleartax, and major Indian cryptocurrency exchange Zebpay is seeking to bring some clarity in helping investors with filing taxes on their cryptocurrency profits and enabling taxpayers to better understand taxation laws on cryptocurrencies.
“[W]e aim to clear the air around [the taxation of] digital currencies,” said Cleartax founder and chief executive Archit Gupta on announcing two new services in partnership with the exchange.
The ‘Cryptocurrency Taxation Advisory’ plan is described as a service that will help crypto investors and traders with all queries related to taxation on trading and the sale of cryptocurrencies. A separate ‘Tax Filing for Gains from Cryptocurrency’ service aims to assist individuals and businesses in filing income tax returns on profits or losses from the sale of cryptocurrencies.
With Indian authorities explicitly refusing to recognize bitcoin as legal tender, a number of major Indian banks, both public and private, have frozen bank accounts belonging to cryptocurrency exchanges in recent months. The move has severely dented trading volumes and activity among exchanges despite the lack of any clear legislation or regulation for the sector.