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    Indian Tax Authorities Probe 500K Bitcoin Traders for Alleged Tax Evasion

    © AFP 2019 / Justin TALLIS
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    The probe comes a week after tax officials seized documents during simultaneous raids at Bitcoin exchanges in Delhi, Bengaluru, Hyderabad, Kochi and Gurugram which hints at the probability of high net worth individuals (HNIs) skirting taxes for the gains they have made by trading Bitcoins.

    New Delhi (Sputnik) —  The Indian government has initiated a probe against at least half a million people, including public figures and celebrities, who allegedly invested a large amount of their wealth into virtual currencies in the last few months through exchanges spread across the country. Gains made from Bitcoin trading come under the tax net as they can be classified as "taxable assets" if not income, according to Indian tax laws.

    "The department has collected a large number of documents, including customer's credential verification papers, last week from the exchanges. After careful scrutiny, the department will start sending notices to the investors who have invested large sums in the cryptocurrencies," an income tax official who did not wish to be named told Sputnik.

    READ MORE: New Rules Are 'Expected Response' to Bitcoin Becoming More Mainstream – Investor

    Approximately two million people have been registered on these exchanges; one-fourth of them are consistently conducting transactions in these virtual currencies, the official said.

    The Reserve Bank of India, the country's central bank, has issued the warning from time to time to the users, holders and traders of virtual currencies about the potential risks. However, at present, there are no regulations governing virtual currencies in India.

    Taking into consideration the concerns raised at various forums on the increasing use of virtual currencies and their regulatory challenges, the government of India appointed an inter-disciplinary committee to take stock of the present status of virtual currencies both in India and globally and to suggest a framework for regulation including issues relating to consumer protection, taxation and money laundering among others. The committee has reportedly submitted its recommendations but the government has yet to study them.

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    cryptocurrencies, tax evasion, Bitcoin, Reserve Bank of India, India
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