After repeated cautionary circulars from the apex bank, in April 20 17 the federal government set an interdisciplinary committee–chaired by special secretary (economic events )–to examine the current framework of virtual currencies. The committee was designed to submit its report within a couple of months. The analysis has been set up to accept stock of their present status of virtual currencies both in India and internationally, examine the existing worldwide regulatory and legal structures regulating virtual currencies, imply measures for managing such virtual currencies including problems regarding consumer protection, and money laundering and examine another matter associated with virtual currencies which may be relevant. In December 20 17, fund minister Arun Jaitley told the media which the federal government does not believe Bit-coin as a lawful tender and it’s taking care of recommendations for such currencies.
Although the Reserve Bank of India (RBI) advises caution because of its usage, Bit-coin isn’t illegal in India. Cryptocurrency exchanges operate freely and we can express that Bit-coin isn’t legal. Thus, if it’s a legal thing, why will there be silent on its regulation? Also, who is responsible for controlling it?
The RBI has so far issued three alarms related to Bit-coin and other virtual currencies (VC). In all these, launching December 2013, the RBI has cautioned users, traders and holders on the risk of these currencies and clarified that it has not given any licence or authorisation to any entity or company to successfully operate such strategies or deals. At a December 2013 telling, the RBI said,”The creation, trading or usage of VCs including Bitcoins, as a medium for payment are not authorised by any central bank or monetary authority. No regulatory approvals, registration or authorisation is stated to have been obtained by the entities concerned for carrying on such activities.” Besides warning the general public, the RBI hasn’t obtained any regulatory stance on virtual currencies yet.
Though there are still no clear regulations or proper jurisdiction, the income tax section is apparent that tax needs to be paid to all cryptocurrency transactions. Though there’s absolutely not any reference to cryptocurrencies from the Act, income tax will still need to be paid on any profits accruing from cryptocurrency transactions.
Meanwhile, the Securities Exchange Board of India (Sebi) about 20 December explained that when Bit-coin is believed to be a commodity derivative then Sebi might govern it. In countries like the US, the Sebi-equivalent regulatory body is looking into cryptocurrenices. Experts state, considering cryptocurrencies are considered as a commodity, Sebi should consider controlling them.
Last week, incometax department studied that the major Bit-coin markets in India. The survey accounts said, it has been done to get information about transactions and check whether there was a chance of tax evasion. Last week, it was reported that the tax department is set to issue notices to approximately 5,00,000 high net worth individuals trading on the market across India. It includes at a period when there are still no clear regulations on cryptocurrencies and Bit-coin exchanges.