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I-T department, banks crack down on crypto traders

While most countries in the world are still figuring out how to react to the recent surge in transactions related to cryptocurrencies, India seems to have taken a firm stance against their use.

For the past one week, the Income Tax Department has been cracking down upon thousands of people dealing in Bitcoins after a recent survey revealed that transactions worth over $3.5 billion have been conducted nationwide in the last 17 months. The department sent notices to addressees seeking details of these transactions and have asked them to pay capital gains taxes on their earnings.

On the other hand, major banks have been taking action against some of the largest Bitcoin exchanges in India, such as BtcxIndia, Unocoin and Zebpay, for conducting allegedly dubious transactions. Banks like HDFC and SBI have suspended several accounts of these exchanges and some have increased collaterals against them for additional security.

Although the government has not yet officially banned ownership of cryptocurrencies, it has cautioned people against using them as an alternative currency, which is illegal under Indian law. The Finance Ministry is yet to decide whether to treat cryptocurrencies as illegal currencies or just intangible assets that should attract additional taxes.

Last month, Finance Minister Arun Jaitley had gone to the extent of referring cryptocurrencies as Ponzi schemes that are aimed at duping people with honest incomes. He had also warned citizens and business entities against hiding away black money by purchasing cryptocurrencies like Bitcoin, Etereum and Ripple.

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