The Income Tax department is set to issue notices to 4 to 5 lakh high net-worth individuals (HNI) across the country who were trading on the exchanges in Bitcoin. The department found that out of the estimated 20 lakh entities registered on these exchanges, about 4 to 5 lakh were “operational” and indulging in transactions and investments, PTI quoting sources reported.
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 told PTI.
The Income Tax Department last week conducted survey operations at major Bitcoin exchanges across the country on suspicion of alleged tax evasion even as Bitcoin has been touching new highs fuelling investor interest. Various teams of the sleuths of the department under the command of the Bengaluru investigation wing, on Monday, visited the premises of nine such exchanges in the country including in Delhi, Bengaluru, Hyderabad, Kochi and Gurugram, since early morning.
About 4-5 lakh 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. The survey, under section 133A of the Income Tax Act, was conducted for “gathering evidence for establishing the identity of investors and traders, transaction undertaken by them, identity of counterparties, related bank accounts used, among others,” they said.
Bitcoin, a virtual currency, is not regulated in the country and its circulation has been a cause of concern among central bankers the world over for quite a while now. The Reserve Bank of India has also cautioned users, holders and traders of virtual currencies, including bitcoins.
In March, the Union finance ministry had constituted an Inter-Disciplinary Committee to take stock of the present status of VCs both in India and globally and suggest measures for dealing with such currencies. Earlier this month, the Reserve Bank had warned the public of the risks of virtual currencies (VCs).