Leading Indian bitcoin startup Zebpay has issued an official statement falsifying recent reports that suggested that bitcoin has been declared illegal by the Indian government.“Nothing has changed regarding bitcoin’s legal status in India this week.In our opinion, bitcoin is not illegal.Bitcoin is legal under all existing laws.It’s business as usual at all Indian bitcoin exchanges, including Zebpay.”, said an official blog post by Zebpay.Zebpay said that certain sections of the media including a yesterday’s report by The Economics Times said that bitcoin has been declared illegal and can attract anti-money laundering law.Notably, this hoax news spread when a member of parliament (MP) raised the issue that bitcoin is a ponzi scheme.The company went on to explain that bitcoin is not a ponzi scheme, saying:There are a few ponzi schemes which use bitcoin as the payment method.Just like Rupee is not a ponzi, neither is bitcoin.In fact for a few months now, we have been regularly warning our users to beware of such ponzi schemes on our website, Facebook and Twitter accounts.However, last month RBI did issued a statement where it cautioned users, holders and traders of virtual currency, including Bitcoin, about the potential financial, legal and security risks arising from the usage.

According to India Today, the user base of Bitcoin in India has expanded 250 percent since November 2016, when demonetization happened.Like this content?Sign up for our daily newsletter to get latest updates.Although bitcoins have been thought to be illegal, it is far from true, but the government is taking measures to regularise the use of virtual currency Many people have termed bitcoins as an illegal form of currency and even the Reserve Bank of India (RBI) had also warned the investors of the potential risks involved in dealing with Bitcoins.Bitcoins had also given rise to many theories about its taxability i.e.how the taxation will work in case you sale or transfer your bitcoin.Legal status of bitcoins in India Dealing in bitcoins in India is not yet illegal.However, bitcoins have yet to be regulated, which means that the government is not regulating this currency the way it regulates Indian Rupee or any other form of currency.An interdisciplinary committee has already been set up by our government to explore the framework regarding virtual currency.

Treatment under Income Tax Act Any profit or gains made on dealing, trading or buying-selling bitcoins is surely taxable as it gets covered under the definition of income under section 2(24) of Income Tax Act which is a wide section to include every income unless it is exempt under the act.Let’s assume that you don’t have any income other than the income you derive from the sale or trading of bitcoins and the same is less than Rs 2,50,000 i.e.basic exemption limit up to which a person does not need to pay any tax, then in that case you do not need to pay any taxes.But in case your income from bitcoin alone or including other sources like salary or business income is more than the basic exemption limit then the same needs to be declared and you need to pay taxes on the same.In fact, you need to file your tax return as well and also pay advance tax on it.When will bitcoins provide income?Let us break this in to three stages as follows and understand at which stage you need to pay taxes: On purchasing bitcoins: There is no tax liability on simply purchasing bitcoins.

When the value of the bitcoin begins to appreciate: As long as you are holding your bitcoin investments like you do with your stocks or property where in spite of rise in your stock portfolio or property valuation, you do not pay any tax till the time you actually sale it off and book the profit or gains.bitcoin ludvig öbergSimilarly, mere appreciation in the price of bitcoin will not make you pay any taxes till the time you actually sale it or transfer it to someone in exchange of any other benefit in cash or kind, irrespective of the magnitude of the appreciation.trace mayer bitcoinOn sale or exchange of bitcoins: This third important scenario actually gives rise to taxability, it means the moment you sell or trade your bitcoins or exchange with any other thing say Indian or foreign Currency currencies or even trade your bitcoins as a barter for buying any other thing or paying for any kind of purchases, the taxability arises.bitcoin major players

It means that in any of these scenarios, the resulting gains will become taxable, you need to declare, compute and discharge the tax liability as mentioned earlier in the article.The author is a Chartered Accountant and the Chief Gardener & Founder Director of Money Plant Consulting, a leading Tax & Investment Planning Advisory Service ProviderMay 24, 2017May 24, 2017 Whether Virtual Currencies  should be banned, regulated or observed?Indian Government asks citizens Bitcoin ,at the moment is, neither legal nor illegal in India.Government has yet to take a decision regarding legality of virtual currencies, such as Bitcoin.The government had initially constituted an Inter-Disciplinary Committee with a sole purpose of examining and reviewing virtual currencies like Bitcoin.The committee will submit its report to the Government and then the Government will take necessary steps.Various representatives from Department of Economic Affairs, Department of Financial Services, Department of Revenue (CBDT), Ministry of Home Affairs, Ministry of Electronics and Information Technology , Reserve Bank of India ,NITI Aayog and State Bank of India  are the members of the committee.

(Click here to read more details) “DIGITAL INDIA”an initiative launched by our Honorable Prime Minister, Shri Narendra Modi , attempts to make India a digital economy.Maybe this would be a great time for Bitcoins and other digital  currencies to get legalized in India.Recently the Indian Government has also asked citizens of India to express their thoughts regarding Bitcoins and other virtual currencies, on the government website, mygov.in The government has raised following questions on which it asks citizens to give brief comments: 1.Whether Virtual Currencies (VCs) should be banned, regulated or observed?In case VCs are suggested to be regulated: What measures should be taken to ensure consumer protection?What measures should be taken to promote orderly development of VCs?Which appropriate institution(s) should monitor/ regulate the VCs?In case VCs are not suggested to be regulated: What should be the effective self-regulatory mechanism?What measures should be adopted to ensure consumer protection in this scenario?

The government of India has fixed May 31, 2017, as the last day by which citizens can express their thoughts on digital currencies.Some of the comments posted by the users: Following may be the expected tax implications on Bitcoins: 1.If any amount is earned by buying and selling of Bitcoins on a regular basis, the income would be charged under the head “Profits and Gains from Business and Profession” 2.If any amount is earned by investing in Bitcoins for a longer period of time, the income may be charges under the head “Income from  Capital Gains” Further Capital Gains are divided into two categories that is Long Term Capital Gains and Short Term Capital Gains each having different rate of tax.a.The income is charged under Long Term Capital Gains if investment done in any asset (except shares/mutual funds) is redeemed after twenty four months (previously it was thirty six months).For Shares/mutual funds, the income will be taxed as Long Term Capital Gain if the investment is redeemed after twelve months.

b.The Income is charged  under Short Term Capital Gains if the investment in asset is redeemed before twenty four months ( except for shares/mutual funds ) and twelve months ( in case of shares/mutual funds) It is possible that the time period to be considered while taxing the capital gain income from Bitcoin or Virtual Currencies may be same as that of Shares/Mutual Funds or even below that.(NOTE: This statement is just a viewpoint of the author and it shall not be considered as a fact or law) ASSOCHAM, India’s biggest and oldest Business chamber had organized India’s First Global Summit on Bitcoins and Blockchain.The event was concluded successfully and was attended by delegates from all over India.The speakers and moderators along with the member of ASSOCHAM were in the view that Indian Government should immediately take some actions and make it clear about the legality of Bitcoins in India. was proud to be the marketing partner for the event.Click here to read details about the event.