Income Tax Authorities Keeping Vigilant Eye on Bitcoin Brokers & Dealers

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  • The income tax authorities have conducted survey on major Bitcoin and other crypto currency exchanges across the country.
  • A whooping of 1500 per cent rise in the value of Bitcoin within a year attract the various investors to invest in this virtual currency.
  • Despite repeated warning of Reserve Bank of India, a large number Investors have invested in Bitcoin to have short term gain.
  • Though, the Reserve Bank of India has not legally recognized this currency, there is no status of crypto currencies in India as this is highly volatile in nature.

Now the major question is that are the profits out of trading of Bitcoin taxable?

  • Due to lack of legal sanction and absence of any controlling authority there is uncertainty among Bitcoin holders over tax returns.
  • Still the gains out of these transactions shall be treated as short term capital gains.
  • By conducting survey, under section 133-A of Income Tax Act, 1961, the Income Tax Authorities are scrutinizing the investors and traders as well as major exchanges of Bitcoin.
  • The officers of Income Tax are conducting survey on nine virtual currency exchanges in Bangalore, Hyderabad, Mumbai, Delhi and Kochi aiming at identify the tax evasion and sources of funds.
  • The surveyors are intended to discover the traders, investors and transaction undertaken by them with a view establish their identity and in order to educate them how treat its income/gain.

Hence, the Bitcoin traders needs to be cautioned while investing in this virtual currency at the Income Tax Department has been started keeping an eye on them.

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