Economy

Income Tax (IT) department scans Bitcoin exchanges

Income Tax (IT) department scans Bitcoin exchanges

As per Reuters, a spokesperson - Surbhi Ahluwalia - from the Income Tax Department has confirmed that the agency has visited nine major cryptocurrencies operating in metro cities like Pune, Bengaluru, Kochi, Hyderabad, and Delhi.

The income tax officials have reportedly sought information on the records maintained by the exchanges and earlier reports suggested that some tax evaders may be parking illicit money in Bitcoin.

In wake of the massive bitcoin rally, Income Tax (I-T) Department, in an apparent precursor to a crackdown, conducted survey operations on Wednesday at major Bitcoin exchanges across the country on suspicion of alleged tax evasion, official sources said.

The CEO of Coinome, an Indian exchange, said at the time of the central bank warning: "If India had to ban virtual currencies then they would have done that by now".

Under section 133A of the IT Act, the survey is being conducted for gathering evidence in order to establish the identity of investors and traders, transaction undertaken by them, identity of counterparties, related bank accounts used, among others.

Sources told DNA, "We are collecting the name of investors and their transaction details". The survey teams have some special data about the working of these exchanges.

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Also, several real estate brokers, who have left the sector, are now luring investors to invest in Bitcoins, promising them returns of more than 300 per cent in just three months.

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

The regulators said they were also investigating cases from a year ago when large amounts of "black money" had been laundered using bitcoin during the demonetization process in the country.

The news comes after reports of the government having set up a cryptocurrency panel, which recommended shutting down dealers of these unregulated and decentralized currencies across the country.

Bitcoin and other cryptocurrencies are still not regulated in India.

As things stand, no license or authorisation has been granted to any cryptocurrency-related outfit, because the government does not recognise it as legal currency.