Bitcoin – The Digital Currency With Amazing Growth In Valuation

 

13 December 2017 The Income Tax Department performed survey operations at leading bitcoin exchanges across the country on doubts about alleged tax evasion. They unearthed several lakh entries of high-net-worth individuals (HNIs) in their databases, according to official sources. The operations that started the early morning at 9 prominent exchanges in Delhi, Ghaziabad, Gurugram, Pune, Kochi, Hyderabad and Bengaluru were continuing till latest reports came in.

Sources mentioned the taxman has employed a huge assortment of software cloning and ‘mirror imaging’ gadgets to extract full details of emails, addresses and correspondence ID of the investors and players from the computers.

They mentioned that the sleuths identified a number of high-net-worth individuals (HNIs) and customer ID in these databases and prima facie nearly 20-25 lakh such records have been found.

The Surveys are conducted under Section 133A of the Income Tax Act, which furnishes them authority to enter the office or business premises of any organization and check documents, account books, valuables and data for his enquiries (and so this differs from raids – where even the houses of those under scanner and their aides can be raided).

Surveys are usually conducted during office hours (but once started, can go on for any number of hours), and inventories of cash, stocks can be done, statements recorded – but the seizure of any documents or properties are not permitted.

The move occurs at a time the government is employing measures to decrease use of cash in the economy and to promote digital transactions. These are simpler for the tax authority to supervise as financial institutions like banks and broking houses are needed to report those.

The government and the Reserve Bank of India (RBI) are not controlling cryptocurrency at present and the Income Tax Department desires to ensure benefits from transacting in this instrument are not restrained. The Central Bank is concerned that the anonymity regarding the counter-party in virtual currency dealings may lead its users to involuntary involvement in money laundering or terrorist financing.

The Major Bitcoin Exchange Centres Across India

 

Recurring calls and messages dispatched to the top bitcoin exchanges and bitcoin firms like Zebpay, Coinsecure and Unocoin went unanswered.

Built in 2009, bitcoin is the most prevalent cryptocurrency and possesses the biggest market cap presently. As per coinmarketcap.com, the current market cap of bitcoins are valued at $287 billion. Bitcoin doesn’t possess any underlying assets and obtains value from use. The bitcoin price crossed $17,000 on Wednesday. In the previous one year, the price of bitcoin has multiplied over 21 times.

RBI warned the public on 5 December about the potential economic, financial, functional, legal, consumer protection and security-based risks involved with transacting in virtual currency. The central bank mentioned it has not accorded any licence or authorization to any entity or company to run such schemes or deal with bitcoin or any virtual currency”.

The finance ministry also established a committee in April to review the global regulatory systems governing virtual currency and the measures India required to undertake to safeguard consumers and avoid money laundering.

A Mumbai-based chartered accountant, Gautam Nayak, explained that income tax will have to be paid on any benefits arising from a cryptocurrency deal. The tax department is probably to ask investors and traders whether their virtual currency transactions were reported or not.”This could be for transactions up to March 2017. For the current financial year. one still has time to file the tax return,” Nayak said.

The government has also stated that it does not recognise cryptocurrency as legal tender in India as at present. In March, the Union finance ministry formed an Inter-Disciplinary Committee to review the present status of virtual currencies both in India and internationally and propose measures for dealing with such currencies.

The committee has presented its report to the government and it is being evaluated. Bitcoins were in news recently after a huge global ransomware invasion ‘WannaCry’ hit systems in over 100 countries. The cybercriminals asked a fee of nearly USD 300 in crypto-currencies like bitcoin for unlocking affected gadgets.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.