Indian authorities expand probe into bitcoin traders

Indian authorities are quite focused on the way cryptocurrency exchanges function and how they conduct trades. Apparently, the authorities are looking to make sure that these transactions are not associated to tax evasion.

Indian tax authorities to issue notice to bitcoin traders

As part of its investigation, the Income Tax department will allegedly issue notices to up to 500,000 bitcoin traders in exchanges across India. The move comes after the tax authority has previously conducted visits at around nine bitcoin exchanges in different locations across the country.

While not a lot of details were available regarding the scope of these visits, some media reports indicated that the Income Tax Department was performing some surveys focused on establishing the identity of the people who invest and trade in bitcoin. The authority was allegedly also looking into the transactions made by these investors, but also the identity of counterparts and the bank accounts they used.

The investigation started on suspicions of tax evasion, it has been reported. The authority only officially revealed then that it was collecting some information from exchanges, including the identity of investors and their source of investment. The aim of the whole probe is to collect taxes if illegalities have been committed.

Apparently, the collection of documents led to some results, as the tax authority has found between 400,000 and 500,000 traders with a high net-worth that caught the attention with potential irregularities. The authority looked into around 2 million individuals who were registered on about 9 exchanges. The authority stated that:

“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.”

For the moment there were no other details available regarding the probe conducted by the tax authorities. However, Indian authorities have not shown too much support for bitcoin so far. In fact, the country's central bank has previously issued a public caution on investing into cryptocurrencies.