India’s Government is Planning to ‘Take Steps’ to Make Cryptocurrencies Illegal
As the cryptocurrency market increases in value on the perceived positive news from the U.S. Senate hearing, India’s government is planning measures to ensure that digital currencies become illegal within its payment system, according to a finance ministry official.
It’s also planning to appoint a regulator to oversee unregulated exchanges that trade in cryptocurrency assets, said S.C. Garg, Economic Affairs Secretary, reports Reuters. He said that a government panel, which Garg is heading, is expected to submit a report looking into the issues related to digital currencies in the current fiscal year, ending the 31st March.
“The government will take steps to make it illegal as a payment system,” he said. “We hope now within this financial year the committee will finalize its recommendations … certainly there will be a regulator,” he added.
News of this comes at a time when India’s finance minister, Arun Jaitley, expressed in his budget speech to lawmakers last week that the government doesn’t consider cryptocurrencies such as bitcoin as ‘legal tender’. He added that the government wants to ‘eliminate [the] use of these crypto-assets in financing illegitimate activities or as part of the payment system.’
India’s central bank, the Reserve Bank of India (RBI) has issued repeated warnings on the risks that traders face when trading in digital currencies. Notably, while the legality of trading cryptocurrencies in India has remained in a grey area the government has not placed curbs on the sector.
It seems that now the tide may be changing.
Not only that, but investors who profited from cryptocurrencies, but failed to pay taxes could see find themselves having to pay what is owed.
Last month, it was reported that India’s tax department had sent ‘tens of thousands’ of tax notices to digital currency users following a nationwide survey. Over a 17-month period, more than $3.5 billion worth of transactions in cryptocurrencies had been conducted by the country’s citizens. The result of which saw investors being sent the notices for the government to collect tax on capital gains.
Now, in further developments it appears that up to 100,000 investors have been issued with these notices, according to Sushil Chandra, chairman of the Central Board of Direct Taxes (CBDT), reports Quartz.
Speaking at an event in New Delhi, Chandra said:
“We found out that there is no clarity on investments made by many people, which means they have not declared it properly…we have informed all the DGs (director-generals of income tax) across India. They are issuing notices and so that would be taxed.”
Reports suggest that up to 500,000 notices have been sent; but it appears that authorities are targeting those who have made ‘significant gains’ in cryptocurrencies.