Transaction in Bitcoin under IT scanner for tax evasion

Transaction in Bitcoin under IT scanner for tax evasion

Bitcoin's meteoric rise and unprecedented growth in the past two months has caused government bodies from across the globe to intervene and India remains no exception.

On Wednesday, taxmen of the I-T department under the command of the Bengaluru investigation wing, visited the premises of exchanges in various cities including Delhi, Bengaluru, Hyderabad, Kochi and Gurugram. India's tax authority fears that as Bitcoin popularity is growing at a rapid speed, it might trigger the creation of several e-Ponzi schemes and hence to safeguard investors against these risks, the tax department is investigating Bitcoin exchanges operating within the country.

Virtual currency Bitcoin is under the radar of the Income Tax department which on Wednesday conducted surveys at major bitcoin exchanges acrosss the country, on suspicion of alleged tax evasion, official sources said.

"Though Bitcoin is a grey area in India (the RBI has not termed it as an illegal tender yet), the transactions in the currency have gone through the roof, from Rs 1,200 crore in the last financial year to '10,000 crore in the current financial year".

The department is conducting the surveys under section 133A of the Income Tax Act.

Sources told DNA, "We are collecting the name of investors and their transaction details". The team of officials was well equipped with professional software tools which could recover all the financial data and inputs of the exchanges.

The tax official declined to comment on the central bank's concerns, saying the tax department was looking only into the tax implications.

The Reserve Bank of India isn't altogether keen on citizens dabbling in these currencies, as they aren't regulated.

In March this year, the government had said that use of virtual currencies like Bitcoins is not authorised by RBI and could result in breach of anti-money laundering provisions.

According to the report, the virtual currency has recorded monthly trades of an estimated to be between Rs5,000 crore and Rs10,000 crore with an average 50,000 people registering everyday on Bitcoin exchanges. This is because there are no regulations about virtual currencies in India.

The Government of India has however, notlegalized any form of cryptocurrency like Bitcoin till date.

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