Relief for cryptocurrency: Govt panel may consider to legalise Bitcoins

Cryptocurrency may become legal in India. The government which was hell-bent on banning cryptocurrencies such as Bitcoins in the country may allow its use with some conditions, according to reports in media.

The reports added that a panel formed by the government may give a decision in support of allowing cryptocurrency and influence the government’s early stance of banning it.

Finance Minister Arun Jaitley’s statement at the Budget 2018 that Bitcoins and other such currencies are not a legal tender, sent a wave of shock among cryptocurrency traders.

The government later assured that it will wait for the panel to submit its report. The panel was set up in December last year to study the impact of cryptocurrencies and come up with recommendations to regulate them.

The government, however, continues cracking down on cryptocurrency traders and businesses related to it.

In January, the Registrar of Companies (RoC), under the Ministry of Corporate Affairs, stopped registering cryptocurrency exchanges under the Companies Act, 2013.

In the latest attempt, the Reserve Bank of India (RBI) directed all regulated entities, including banks, e-wallets, and payment gateway providers, to stop dealing with individuals and businesses in the decentralised currency including Bitcoins. The regulator gave banks a deadline of July 6 to adhere to the new rule.

However, crypto traders, exchanges, and the Internet and Mobile Association of India (IAMAI) challenged the banking regulator’s decision and filed a writ petition in the Supreme Court to put a stay on the RBI decision.

As per the chairman of Central Board of Direct Taxes (CBDT), Sushil Chandra, almost 4 lakh people have invested in cryptocurrencies, through illegal means. It found out that Rs 100 crore investments had been done where sources were undisclosed. It has sent people notices and those people who haven’t invested in the proper way and capital gain on crypto investments will be taxed.

Experts say that the government should tax Bitcoins and other altcoins either as short term or long term capital gains under the head ‘Capital gains’ as crypto currency shall be considered as an asset. If the crypto currencies are mined then it shall be taxed under the head ‘Profit from Business and Profession’.

The development was reported in ET.