After the massive bitcoin rally, the Department of Income Tax (IT), in apparent precursor of an offensive, carried out reconnaissance operations on Wednesday in the main Bitcoin exchanges throughout the country on suspicion of alleged tax evasion, said official sources. They said that several of the department’s detective teams, under the command of the Bengaluru research wing, visited nine such premises in the country on Wednesday, including Delhi, Bengaluru, Hyderabad, Kochi and Gurugram, since early in the morning.
Below are the crackdown on the bitcoin trade by Indian regulators
1. The income tax department performs a survey on Wednesday, according to article 133A of the Income Tax Law, to “gather evidence to establish the identity of investors and traders, transaction made by them, identity of counterparts, related bank “accounts used, among others”
2. The Reserve Bank of India (RBI) also warned users, owners and merchants of virtual currencies, including bitcoins. In March, the Ministry of Finance of the Union had set up an Interdisciplinary Committee to assess the current status of venture capitalists both in India and globally and to suggest measures to deal with those currencies.
3. The Finance Minister, Arun Jaitley, in November, said that the government’s position is clear. “We do not recognize this as legal currency from now on.”
4. Taking cognizance of the concerns raised in various forums from time to time regarding the increasing use of virtual currencies (VC) and regulatory challenges, the Department of Economic Affairs (DEA) formed a committee with representatives of DEA, Department of Financial Services (DFS)), Ministry of the Interior (MHA), RBI, Niti Aayog and SBI. The committee has presented its report and is being examined.
5. In February of this year, RBI had said: “Any user, owner, investor or merchant who works with virtual currencies does so at their own risk”.