Cryptocurrency: Bitcoin and other cryptocurrencies are an unregulated market in India. They are not illegal, but the RBI has on several occasions cautioned investors of inherent risks involved in investing in crypto-currency referring it as a “ Ponzi Scheme”.
Now that the transactions are looping out all the investors and tech freaks, the government of India is considering framing a regulation on these digital currencies since last April. The Income Tax Department seems to make a considerable effort to understand the loopholes of digital currency and have finally figured out a way how these investments can be taxable. And the result is thousands of cryptocurrency traders and investors have received tax notices.
As the department claims – “Even though the Bitcoins are not specifically mentioned in Income tax act, Bitcoins are the assets which are bringing the investor a huge amount of capital gains as the price increased much fold within a short period of time”.
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With China and Japan has already cracked down on the digital currencies with their regulations, It’s a fact that RBI took its space to figure out the market and to their surprise, surveys found that Indian Citizens conducted more than $3.5 billion traders and other transactions across a 17-month period. Maybe this is the reason why the government can’t take on a blind eye on this issue as it is high time that the governance gets affected if the investors are not saved from the un-regulatory mining that is happening around the cryptocurrency buzz.
But the question of the hour is not about getting notices from the income tax department but how these digital currencies can be taxed.The true virtue of cryptocurrency lies in it core feature stating – “No single government have the control over it”. Does these acts from the government gonna effect the true nature of the cryptos!?Right now the currency is not recognized by the government and come under the purview of no authority. However , Saurabh Agrawal, CEO and Co-founder of Zebpay, a Bitcoin exchange, agrees, “One needs to pay tax on profits made from investing in Bitcoin. One should declare the income while filing taxes”. Regarding the same Dinesh Sharma, Special Secretary in the Economic Affairs Department and chairman of the nine-member inter-disciplinary committee, says, “ According to the law if somebody makes some money that should be subjected to income tax.”
The issue about the taxability is still in the main debates as the government trying to proactively regulate it as per the law with the help of techies. The whole scene is adding on to the defaming of cryptocurrencies on all platforms and might affect the trade and mining in India with the current situation at Haze.