Income Tax Division Turns heart On Bitcoin Trades across Country , checks for evasion -What Does It Mean For bitcoin User From India?

The income-tax authorities have conducted survey on brokers of Bitcoin across  the country in the first major swoop on virtual currencies owing to suspicion of tax evasion.

The surveys on nine virtual currency exchanges in Bengaluru, Hyderabad , Mumbai , Delhi and Kochi are aimed at ascertaining the source of fund and tax evasion , If Any Following recent reports of large-scale encasing of  cryptocurrencies, a Central Board of Direct Taxes Official Told ET.

"Survey have been carried out to ascertain if there was tax evasion," said the official, who did not wish to be identified. The surveys have been conducted under Section 133A of the income Tax Act, according to the official, who said the Income Tax Department is not concerned with the legality aspect of Bitcoins.

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Bitcoin price has crossed RS 11 Lakh in India , setting alarm bells ringing among the authorities. The Reserve Bank of India , which had earlier cautioned cryptocurrency users, recently issued another strong warning  on virtual currencies. However, the Government of India has yet to clarify its stance on the legal status of Bitcoins.

China had clamped down on cryptocurrencies, directing its two largest Bitcoins platforms, BTCC and OKCoin , to stop all trading operations. The surveys , the official said, are largely aimed at gathering evidence for establishing the identity of investors and traders , transactions undertaken by them, Identity of counterparties and related bank account Used.

The survey Teams , another official said, are armed with various financial data and inputs about the working of these exchanges, and that this is the first big action against then in the Country.

A finance ministry interdisciplinary committee  had in a report  advised caution on virtual currencies, and the Enforcement Directorate and tax authorities had been keeping a watch on them for some Time.

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