The Income-Tax Department has started paying “visits” to a few Bitcoin mining companies, with most of the officials looking for possible instances of tax evasion and for more information on how income tax laws could be applied to the digital currency community at large.

The ‘visits’ by I-T department come a few days after the Enforcement Directorate (ED) raided India’s biggest Bitcoin trading platform and a week after the Reserve Bank of India (RBI) issued an advisory that warned the public of the risks involved with virtual currencies. A team of close to 15 tax officials `visited’ Tumkur-based Coin Monk Ventures, a Bitcoin mining start-up that creates the digital currency, on Wednesday.

“They took interviews of my employees and were happy that Coin Monk was a properly registered company. Much of the discussion that took place was over how Bitcoin actually works and how income tax can be levied on miners and exchanges,” said Satvik V, Founder, Coin Monk.

According to Mr. Satvik, the I-T department is interested in collecting a database on how many digital currency users there are in India and whether they can be identified and tracked.

“After the visit, they issued a summons for me to meet them at their Bangalore office. They have asked me to submit a technical paper on how Bitcoin works, and, more importantly, what role a Government authorized exchange could play,” he added.

The actions of the ED and the I-T department have sent tremors throughout the mainstream Bitcoin community in India, if only for the reason that there is still no official regulation on how companies involved in dealing with digital currencies should comply with anti-money laundering and financial transaction laws.

Digital or virtual currencies such as Bitcoin are generated through complex computer calculations and have gained widespread acceptance in India despite a natural scepticism to assets not backed by tangible entities such as land. After the RBI warning last month, a number of Bitcoin operators shut shop.