Bitcoin Trading: I-T Issue Notices To 400,000 HNIs Across India

By Nithya Nair
Subscribe to GoodReturns
For Quick Alerts
Subscribe Now  
For Quick Alerts
ALLOW NOTIFICATIONS  
For Daily Alerts

    Widening its probe into bitcoin investments and trade, the Income Tax (I-T) department is set to issue notices to 0.4 million to 0.5 million high net-worth individuals (HNI) across the country who were trading on the exchanges of this unregulated virtual currency.

    The taxman had conducted surveys at nine such exchanges last week to check instances of tax evasion. Bitcoin Trade Under Scanner: Tax Authorities Visit Bitcoin Exchanges Across India

    Bitcoin Trading: I-T Issue Notices To 400,000 HNIs Across India

    The department, official sources said, found that out of the estimated 2 million entities registered on these exchanges, about 4 to 5 lakh were "operational" and indulging in transactions and investments.

    Sources told PTI that the Bengaluru investigation wing of the tax department, which supervised last week's operations, has now dispatched the information of the individuals and entities found on these databases to eight other such wings across the country for a detailed probe.

    "Those individuals and entities whose records were recovered by the department are now being probed under tax evasion charges. Notices are being issued, and they will have to pay capital gains tax on the bitcoin investments and trade," a senior official privy to the operation said.

    About 0.4-0.5 million HNIs and their businesses are being issued notices which will first seek their relevant financial details and subsequently establish the tax demand if any, he said.

    As the bitcoins or the virtual currencies (VCs) are illegal and unregulated in the country as of now, the IT department has taken action as per the existing provisions, they said.

    The survey operations conducted last week, under section 133 A of the Income Tax Act, were undertaken for "gathering evidence for establishing the identity of investors and traders, the transaction is undertaken by them, the identity of counter-parties, related bank accounts used, among others," they said.

    A survey action under the IT law pertains to the tax officials making a surprise visit to the business premises of the party under action but not their residential ones.

    The trigger for the action is understood to be the huge spike being registered in the value of bitcoins and other virtual currencies in the recent past.

    Suspected black money being converted into white, post demonetization, through the use of bitcoins was also under the department's scanner, officials said.

    Earlier this month, there was a spurt in the value of a bitcoin. It rose from under $10,000 at the start of the year to close to $20,000, before a sharp 20 per cent plunge within hours.

    Bitcoin, a virtual currency, is not regulated in the country and its circulation has been a cause for concern among central bankers the world over for quite a while now.

    The Reserve Bank of India (RBI) has also cautioned users, holders, and traders of virtual currencies. The government has also said that it does not recognize 'crypto-currency' as legal tender in India.

    In March, the Union finance ministry constituted an Inter-Disciplinary Committee to take stock of the present status of virtual currencies both in India and globally and suggest measures for dealing with them.

    The committee has submitted its report which is being examined.

    Goodreturns.in 

    Read more about: bitcoin hni
    Story first published: Tuesday, December 19, 2017, 10:36 [IST]
    Company Search
    Enter the first few characters of the company's name or the NSE symbol or BSE code and click 'Go'

    Find IFSC

    Get Latest News alerts from Goodreturns

    We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Goodreturns sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Goodreturns website. However, you can change your cookie settings at any time. Learn more