Indian government plans to legalize Bitcoin and impose taxes on adopters

According to a news report broadcast by CNBC India on April 20, the Indian government is inclined to grant legal status to virtual currencies such as Bitcoin and impose taxes on adopters.

Last week, the Indian government set up an interdisciplinary committee to study the country's virtual currency framework. The committee was mainly initiated by the Indian Ministry of Finance, which expressed great concern about the development of cryptocurrencies in India.

According to a CNBC report today, the committee heard discussions on the legality of virtual currencies such as Bitcoin in India. The report also stated that the committee is moving towards legalizing cryptocurrencies.

Host: The Indian government wants to give Bitcoin legal status and the law wants to tax it.

We connected with CNBC's Lakshman Roy to find out more about how the Indian government views virtual currencies.

Roy: “Currently virtual currency (here we are referring to Bitcoin) has no legal status in India. Hence, any transaction done using it has no legal validity. So, the possibility of legalizing Bitcoin is high.

This means that the Indian government will introduce relevant actions and laws, and there will be regulation for Bitcoin. The Reserve Bank of India (RBI) will issue guidelines for Bitcoin trading and investment, and the tax department will levy taxes on investors. If you use Bitcoin for international payments, FEMA (Foreign Exchange Management Act) will be responsible for it. Moreover, no matter how much return you get from your Bitcoin investment, you will have to pay income tax.

Most importantly, if investors want to invest in virtual currency (Bitcoin), they must comply with a strict KYC (Know Your Customer) approval process.”

Notably, he also revealed:

“These things have been discussed and put in front of this newly appointed committee. Most believe that Bitcoin must be regulated, but some disagree and say it should be banned and there is no need for regulation. Despite this, a ban still seems unlikely. The committee should make a decision between May 15-May 20, and then they will submit their proposal to the Ministry of Finance, which can then take regulatory action.”

What do you think?