With following the recent Budget 2018 announcements, the IT dept. has started sending legal notices to Bitcoin investors. Already few lakh notices has been sent to the individuals that have invested in bitcoin. The IT dept. wants such investors to pay up the advance due tax on capital gains from these investments.
Sushil Chandra, Chairman of CBDT said, “We have issued notices (to investors) and they (many of them) have agreed to pay taxes. We will definitely take taxes as far as the money is concerned which is invested (in bitcoins trade) and is unexplained. The government does not consider crypto-currencies legal tender or coin and will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payment system.”
Income Tax dept. conducted a survey operation at registered Bitcoin exchanges in the country last year. Those surveys were conducted under the provision of Income Tax Act. The department was able to identify bitcoin traders and investors from these surveys. The government also has the data of traders, investors, transactions between them and the bank accounts used for bitcoin trading.
Finance Minister Mr. Arun Jaitley also clarified the legal status of Cryptocurrencies in his Budget speech. He said that the Bitcoin and all other Cryptocurrencies are illegal in India. He also added that Govt. of India will take strict measures to eliminate the usage of Cryptocurrencies. Even earlier, the government of India and RBI had warned about Cryptocurrencies like Bitcoin.
Cryptocurrency experts are advising the government to regulate cryptocurrencies instead of completely banning them. Anshuman Verma, CEO of M1L and the Invention Factory said, “While there could be several risks associated with cryptocurrencies, the fundamentals of the underlying blockchain technology or distributed ledger system is strong. Blockchain technology will find many good use-cases not only in private businesses but also in governance.”