The recent bitcoin bubble has caught the attention of the Income Tax Department as it investigated the possibility of tax evasion through bitcoins. IT Department officials conducted surveys in various major bitcoin exchanges across the country in order to search for potential evasions. This is considered to be the first such action against bitcoin exchanges operating in the country.
The survey teams headed by the Bengaluru investigation wing visited bitcoin exchanges in various cities including Delhi, Bengaluru, Hyderabad, Kochi, and Gurugram. It is said that nine exchanges were searched by the officials today. The teams that visited these exchanges had various financial data and inputs on how the whole process works.
The survey was conducted as per section 133A of the Income Tax Act. The main aim of this survey is to gather evidence about bitcoin investors and establish their identities. A successful survey will also establish the identity of counterparties and the bank accounts used for this process. After gathering this data, the department will focus on investigating the possibility of tax evasion through bitcoins.
Bitcoin, a decentralized cryptocurrency, has been in use for a long time now. However, it has witnessed a massive gain in the recent few weeks. In the international market, Bitcoin is currently trading at a price higher than $17,000. One of the significant improvements in the recent days is that bitcoin has been gaining acceptance as a worldwide currency in different digital markets.
The fact that bitcoin is unregulated has caused a huge concern among central bankers across the world. The Reserve Bank of India has also warned users over buying or holding various cryptocurrencies including bitcoin.
It is also speculated that bitcoin trading price would soon hit $20,000 in the international market. There is also a major speculation that bitcoin would emerge as an acceptable form of currency in the future. Despite these speculations, experts also warn about the risk factor associated with bitcoin investment.
BankBazaar urges its readers to take extreme caution before trading, mining or investing in virtual currencies. BankBazaar does not endorse cryptocurrencies or making investments in cryptocurrencies in any manner. Our only goal is to provide information to our visitors about cryptocurrencies. We advise our readers to consider investing in Mutual Funds, Fixed Deposit, ULIPs and other legally recognised investment avenues rather than risking their capital on extremely volatile and unregulated assets like cryptocurrencies.
The Reserve Bank of India (RBI) issued a Press Release on December 24, 2013, cautioning users, holders and traders of virtual ccurrencies including Bitcoins regarding the potential economic, financial, operational, legal, customer protection and security related risks associated in dealing with virtual currencies. RBI has also clarified vide press release dated February 1, 2017 that it has not given any licence/authorisation to any entity/company to operate such schemes or deal with Bitcoin or any VC.
The Ministry of Finance issued a statement on December 29, 2017 stating that virtual currencies are not legal tender. Mr. Arun Jaitley in his budget speech on February 1, 2018 has clearly stated that the Government does not consider crypto-currencies legal tender or coin.
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