Indian tax officials are investigating transactions at Bitcoin Exchanges across the country on suspicion of alleged tax evasion, official sources have said.
The Income Tax department is conducting surveys in cities such as Mumbai, Delhi, Bengaluru, Hyderabad and Gurgaon. The aim of the survey is to gather evidence to establish the identity of investors and traders, their transactions and the bank accounts used.
The Indian tax authority is not the only one to be looking into cryptocurrencies. The famous US tax authority, the Internal Revenue Service (IRS), has recently asked Coinbase for information on users who had more than $20,000 in annual transactions between 2013 and 2015. This is because they realised that the number of tax returns claiming gains from virtual currencies didn’t coincide with the increasing popularity of them.
Bitcoin’s value has surged more than 17-fold since January, mostly driven by high demand. However, virtual currencies do not have a legal status in India and are not regulated. The Reserve Bank of India (RBI) has recently cautioned citizens about buying or transacting them.
In a statement on 5 December, it warned people of the “potential economic, financial, operational, legal, customer protection and security related risks associated in dealing with such virtual currencies”. Earlier on this year, the RBI also clarified that it had not given authorisation to any company or entity to deal with virtual currencies.
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