India’s Finance Minister, Arun Jaitley, has confirmed that the country’s government will not recognize cryptocurrencies as legal tender, adding that authorities will seek to ramp up efforts to “eliminate” the use of virtual currencies in illicit transactions. Mr. Jaitley’s comments have been misconstrued and embellished throughout the mainstream media, with numerous reports proclaiming that India’s government has declared cryptocurrencies to be illegal.
Indian Finance Minister Again Rejects Cryptocurrencies as Legal Tender
Earlier this week, finance minister Arun Jaitley indicated that the Indian government will not recognize cryptocurrencies as legal tender. Mr. Jaitley also stated that Indian authorities will take action against the use of virtual currencies for criminal transactions, in addition to seeking to reduce the use of cryptocurrencies as a medium of exchange.
“The government does not consider cryptocurrencies legal tender or coin and will take all measures to eliminate use of these cryptoassets in financing illegitimate activities or as part of the payment system,” Mr. Jaitley said.
Numerous mainstream media outlets have interpreted the finance minister’s remarks as indicating an impending prohibition on the usage of cryptocurrency within India’s borders. The fear-mongering reaction has manifested despite Indian officials frequently expressing the government’s position that virtual currencies are not recognized as legal tender in recent months – with minister Jaitley stating “The government’s position is clear, we don’t recognize this as legal currency as of now,” during late November 2017.
Despite the finance minister’s comments deterring the use of cryptocurrencies as a medium of exchange, no indications have been made to suggest that India’s government will seek to prohibit the use of bitcoin as a speculative asset. Karik Shinde of EY India has stated that “The choice to invest in Bitcoin and other cryptocurrencies will be open to end users, the government is taking proactive measures to curb fraud and illicit transactions,” contradicting the dire tone of many mainstream reports.
Indian Cryptocurrency Traders Receive Tax Notices
The chairman of India’s Central Board of Direct Taxes (CBDT), Sushil Chandra, stated yesterday that many cryptocurrency investors “did not pay advance tax” gains accrued through virtual currency exposure.
The CBDT chairman’s comments come after a survey of 9 cryptocurrency exchanges revealed more than $3.5 billion USD worth of cryptocurrency circulations during a 17-month period – precipitating the CBDT’s recent decision to send tax notices to “tens of thousands of people dealing with cryptocurrency” last month.
“We have issued notices (to investors) and they (many of them) have agreed to pay taxes. We will definitely take taxes as far as the money is concerned which is invested (in bitcoins trade) and is unexplained,” Mr. Chandra said.
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