Income Tax Department Considers Taxing in Bitcoin and Other Virtual Currencies

Bitcoin is a cryptocurrency and worldwide payment system. It is the first decentralized digital currency, as the system works without a central repository or single administrator.Bitcoin and the concept of cryptocurrencey is getting popular day by day.Price of 1 BTC has increased over 700% from last few months.After BTC,many crytocurrencies are entering into the market like ETH and many more.Currently the value of 1 Bitcoin lies between 13 lakhs to 14 lakhs INR.The reserve bank of india – RBI has issued a waring against the dealing in virtual crypto currencies.

India’s central tax authority is investigating Bitcoin exchanges to try and find a way to tax transactions.As per the survey conducted by the Income Tax Department,thousands of BTC transactions are taking place every day with out any tax.

Income tax department Surbhi Ahluwalia,spokeperson of income tax department said,”We are looking at collecting information about modus-operandi of Bitcoin exchanges, investors, their source of investment and possibility of collecting tax,”.

Last week, the RBI said it was concerned about Bitcoin, just days after the cryptocurrency hit a record high of just under $11,800, stocking fears that a rapidly swelling bubble could burst.

The RBI had previously said those trading in virtual currencies were doing so at their own risk, given that the central bank had not given a licence or authorisation for any company to deal in such cryptocurrencies.

The tax official declined to comment on the central bank’s concerns, saying the tax department was looking only into the tax implications.

Bitcoin hit another highest value last tuesday and it’s near to touch the $20,000 mark very soon.The government told parliament that the use of crypto-virtual currencies like BTC was not authorised by the RBI and could result in a breach of anti-money laundering laws.Indian govt. is quite worried about crypto transactions and finding a way out to put tax in every transactions of bitcoins and cryptocurrencies.