As Income Tax Department surveys Cryptocurrency Exchanges across India, Bitcoin traders who have registered with KYC details feel safe.
Inspections Across India
The Income Tax Department today has carried out the inspection of Cryptocurrency Exchanges across India. Official sources have cited the reason ‘suspicion of alleged tax evasion.’
Section 133A of the Income Tax Act allows for “gathering evidence for establishing the identity of investors and traders, transaction undertaken by them, identity of counterparties, related bank accounts used, among others.”
Various teams from the department visited the exchanges across India today. Bengaluru investigation wing commanded the overall operation. It is reported that nine exchanges in the country including in Delhi, Bengaluru, Hyderabad, and Gurugram, have been inspected since early morning.
First Major Action
This has been the first major action on Cryptocurrency Exchanges in India. The IT teams have inspected the exchanges with enough expertise and financial tools. This can be primarily seen as a data collection drive. More followup would be seen after rigorous analysis of the data.
Not Regulated In India
The central bank of India, Reserve Bank of India (RBI) has repeatedly cautioned users, holders, and traders of virtual currencies, including bitcoins about the associated risk. But the RBI fell short of issuing any regulation. The government too has taken a wait and watch approach.
The Union Finance Ministry, in March, constituted an Inter-Disciplinary Committee to suggest measures for dealing with such currencies. Indian Finance Minister has only recently clarified that cryptocurrencies do not constitute as legal tender.
Cryptocurrency Exchanges in India have already been enforcing strict Know Your Customer (KYC) norms issued by the RBI. Pancard, Aadharr, and details of the bank account have been a mandatory requirement for most. While this is true, private cryptocurrency to fiat transactions can cause problems. It is hence strongly recommended to only buy cryptocurrencies form responsible exchanges.
Central bankers across the world have raised a cause of concern over the increasing circulation of cryptocurrencies. Cryptocurrency Exchanges in various countries are being carefully scrutinized for money laundering activities.