India income tax department conducted, for the first time Wednesday, surveys on Bitcoin exchanges for alleged tax evasion.
According to Press Trust of India (PTI), teams from the Income Tax Department visited nine bitcoin exchanges under the command of the Bengaluru investigation wing. Those visited include Delhi, Bengaluru, Hyderabad, Kochi, and Gurugram.
It was conducted under Section 133A of the Income Tax Act, which states that the survey enables the tax detectives to gather,
“evidence for establishing the identity of investors and traders, transaction undertaken by them. Thus, the identity of counterparties, related bank accounts used, among others”.
Particularly, the government is taking measures to reduce the use of illegal cash in the economy. This is to encourage digital transactions that make easy for tax authorities to manage banks and broking institutions.
The Reserve Bank of India (RBI) and the government are not regulating cryptocurrency at the moment. However, the tax department wants to consider gains from each and every dealing.
With Bitcoin price now at $16,403.80 at CoinMarketCap, there is a limelight on the cryptocurrency. The Economic Times reported that the government panel recommends shutting down of the use of cryptocurrencies like Bitcoin citing security reasons. However, it means that government is putting an end towards buying and selling of cryptocurrencies in cash.
RBI said that it has not given any license for dealings such as Bitcoin. On December 5, it cautioned about potential economic, financial, operational, legalization, customer protection and risks relating to virtual currency dealings.
There are other issues of concern to the finance ministry such as consumer protection and reducing money laundering.