In right angled $\triangle ABC$ with $\angle B=90 ^{\circ}$, $BD$ is an altitude on $AC$. $P,Q,I$ are the incenters of $\triangle ABD,\triangle CBD$ and $\triangle ABC$ respectively. Prove that the circumcenter of $\triangle PIQ$ lies on the hypotenuse $AC$.
This question was asked today in the Indian National Mathematics Olympiad (INMO) 2015 in which I appeared.I totally had no idea and infact have no idea on how to proceed. Any help would be appreciated.


Let $X,Y$ be points of tangency of incircle of $ABC$ with sides $AB, AC$ respectively. Let $Z$ be reflection of $I$ with respect to $XY$. Then we have $ZX=ZY=IX=IY=BX$ and $ZX \parallel IY \parallel BD$.
Angle chasing gives us $\angle ZBX = \angle XZB = \angle DBZ$, so $BZ$ is bisector of angle $DBA$. Obviously $Z$ lies on bisector of angle $BAC$, so we see that $Z$ coincides with $P$.
So we proved that $YP=YI$. Analogously we show that $YQ=YI$. Thus $Y$ is the circumcenter of triangle $PIQ$, which lies on $AC$.