Bitcoin In India: Now That The Government is Taxing Us, Shouldn't It Be Declared Legal Already?
India sometimes can be a confusing place to conduct business. Often, the government policies direct you in a different direction as compared to the implementation of it all. Our life feels like an irony sometimes. An example is the whole situation around Bitcoin in India.
I've stated on an earlier occasion that a central bank issuing a warning against virtual currencies is akin to saying the sky is blue. It's obvious that cryptocurrencies are a disruptive force to the 'business as usual' established by some of these archaic and corrupt institutions in power, not only in India but across the world.
Some cryptocurrencies like Bitcoin was started to with an aim to break down these barriers of trade and commerce. It was conceived to make this process easier, safer, cheaper and affordable for anyone to do bank globally, without having to deal with insurmountable paperwork. Whether or not it accomplishes this is another discussion altogether.
That said, Indian government isn't open to change in all aspects. The rising crypto adoption in the country is proof of their hesitance to make official comments on legalising it. Recently, I shared information about the I-T department in India conducting raids on several top crypto-exchanges in the country. They have amassed information about all the big players trading in Bitcoin through legal channels.
My point is that all of the current exchanges operating within the geographical confines of India are operating under license and regulations of the Indian government. They are operating freely without any restriction on trade or trade practices. Ofcourse, they have to mandatorily do KYC for all their clients but that is absolutely fine.
Since this fact has been established, it makes me wonder that-if these crypto exchanges are licensed for trade by the government, and the government chases us for tax by issuing over 500,000 tax notices to Bitcoin traders in the country to pay up capital gains tax, then technically, well atleast hypothetically it means to me that Bitcoin is Legal in India.
If it were illegal, the exchanges wouldn't have been allowed to operate. It is the job of the I-T department to tax legal or illegal businesses but it is up to the law enforcement agencies to curb any particular type of business. Let me reiterate that there is no such rule that stops any crypto exchange in the country from functioning normally.
All of this means to me that: My government likes us to continue feeding it through various channels and it will do so whether we like it or not. Hopefully the framework around cryptos will be released in this century as Indian government is not known for it's pace of work unless ofcourse there is some money to be made. Luckily for us, there's a lot of money surrounding cryptocurrencies so we're probably in the good for now!
Perhaps I sounds a little harsh, but then I suppose some criticism was long over due!
If you like my work kindly resteem it to your friends. You may also continue reading my recent posts which might interest you:
- Steemit Mentioned In: How to File Tax Returns in India for Your Bitcoin Profits—My Latest Feature In TheQuint!
- 4 Tips For Steemit Account Recovery & Wallet Security!
- Steemit.Chat Contest #9 + Contest #8 Winners Announcement!
there is always issue in india with bitcoin since most of indian user started work in crypto and i also read last that they not support and clearly said that if you invest and didnt get paid we not take any responsibility of it and you can do on your own risk but they also give tax notice too so in overall they only wants money from us and even though get money from us as its only on our risk and not support if not get paid so it like our hindi quote "me sab ka kahu, lekin mera koi khae to mar jaye."
See our government is not progressive, we take western models and indianize them, but we would never lead.
I see cryptocurrencies as a field where by legalising it we can lead the cause. Now comes the clutter about crypto has a quandary future. Then like stocks and mutual funds do the prior warning thing. People invest at their own risk.
We have hugh unemployment and major poverty issue, why not give people alternative source of income. But we will wait till all countries take such decisions then jump in.
Similar sentiments were expressed regarding legalizing weed but none dared to do that despite 'bhaang' being an integral part of culture of mountains in India. We don't even imitate properly here...
My thoughts exactly!
It amazes me what happens when people give the power of money creation to the state. In truth, we all have the power to "create" value or "currency".
well said.
So true. Many government distorts the value of currency by basically mass printing it. The value comes from the backbone of its people who are productive to society. Even if crypto is the future I do not think it will solve many of the financial problems governments face. The reality is most governments are out of touch with its people.
Well said!
@firepower all points are correct, Government should not provide licensing to currency exchange companies .
I think it is the concern of disclosed and undisclosed income. Those who didnt disclosed it in. ITR are facing the music.... If it wud be CBI raids then it was kind of illegal, if IT are raiding then the case is of undisclosed income...hope m correct....@firepower
Yes that is correct but what's the point of RBI's warnings when the govt is allowing exchanges to operate. Matter of time till the pendulum swings either way and stops.
everything where big money comes in ..govenrmant is putting a hand on..sometimes its a good thing sometimes not
This is a quote form one of the judgements given in India
"The income tax Act considers the income earned legally as well as tainted income alike. There is nothing like an illegal income so far as the Tax Collector is concerned. Even if the assessee was prosecuted by Law Enforcing authorities for commission of offence, the income earned by the offender still would be an income liable for assessment. It is not a defence in such cases that the State is also becoming a party to the illegal act by sharing the booty." (https://taxguru.in/income-tax/illegal-income-is-taxable-madras-high-court.html)
Illegal income is taxable in India , so is in other jurisdictions across the world . Everyone wants a piece of the pie whether its tainted or not. However, its a step forward.
These governments refuse to let the little guy rise up but we must continue to find ways to grow our wealth.
They are saying it's illegal and on the other hand, they are taxing us. It's weird.
@firepower Unfortunately there's no reliable justice system in India.