Recently, the Income Tax Department paid a visit to all the Bitcoin exchanges in the country to identify both the users and the brokers. Ever since a committee is formed in April to check the pros and cons of regulating bitcoin in the country, there have been many speculations, but these raids can mean that finally, the Indian government is taking a step forward with the Bitcoin movement.
The full sweeping operation is being executed because of suspicions of tax evasion by exchange consumers, according to the Press Trust of India. The nine cryptocurrency exchanges the agency visited are in the cities including Delhi, Pune, Bengaluru, Kochi, and Hyderabad.
The surveys conducted under section 133A of the Indian Income Tax Act was performed to gather the identification of all the digital currency investors, their transactions, the bank accounts used, emails, and other data reported the tax department officials.
The survey teams were well equipped with a collection of software tools to seize exchange data, including “cloning and mirror imaging,” and recognized the accounts of some high-net-worth individuals.
A senior executive at the department quoted, “Out of these, about 8-10 lakh entities would be ready for transactions. However, the operations are still on, and final findings will arise later.” The department said that it is also investigating instances where large sums of “black money” had been converted using bitcoin during the country’s demonetization system in November 2016.
With the recent hike in the price of bitcoins, the Reserve Bank of India, country’s central bank set the alarm bells ringing weeks ago, warning “users, holders and traders” of cryptocurrencies over the sensed risks of involvement. The country’s finance minister, Arun Jaitley, also recently clarified that the government does not recognize Bitcoin as legal tender, adding that financial sector watchdogs and the government are working on “recommendations” to regulate the cryptocurrency.” The government’s position is clear, we don’t recognize this as legal currency as of now,” he said at the time.