Pay tax on Bitcoin gains or face legal action, says CBDT Chairman Sushil Chandra

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Updated: February 6, 2018 2:18:42 PM

In a major step to extract revenue from the gains made by investors from the elusive cryptocurrency Bitcoin, CBDT Cheif Sushil Chandra said that those who have profited from Bitcoin, would have to pay tax, else action will be taken against them.

digital currency, virtual currency, bitcoin, cryptocurrency, Securities and Exchange Commission, price of bitcoin, risks of bitcoin, bitcoin security, risky asets, bitcoin risks, cryptocurrency risksPay tax on Bitcoin gains, or face legal action, says CBDT Chairman Sushil Chandra . (Image: Reuters)

In a major step to extract revenue from the gains made by investors from the elusive cryptocurrency Bitcoin, CBDT Chairman Sushil Chandra said that those who have profited from Bitcoin, would have to pay tax, else action will be taken against them. “Those who have earned from Bitcoin, would have to give tax. Their source of income would also be asked and if they don’t pay tax, action will be taken against them,” ANI reported CBDT Chairman Sushil Chandra as saying. Earlier, the head of Central Board of Direct Taxes (CBDT) told PTI that the Department came to know of cases where Bitcoin investors did not pay advance tax on gains from their investment, or did not mention these investments in their previous tax returns. These cases number in a few lakhs, the CBDT boss had said.

“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,” PTI reported Chandra as saying.

Reiterating government’s stand on the digital currencies, Finance Minister Arun Jaitley had said in his budget 2018 speech that the government doesn’t consider cryptocurrency as legal tender. “Will take all measure to eliminate use of crypto in financing illegitimate operations,” said the Finance Minister Arun Jaitley. He also said that the government will  keep exploring working on the blockchain technology. Finance Minister Arun Jaitley tabled budget 2018 today just after the implementation of the historic GST.

Continuing its downward move right at the start of 2018, Bitcoin plunged 20 percent  to a three-month low on Tuesday. The digital currency fell to a low of $5,995.58, at the time of reporting, its lowest since mid November, according to CoinDesk, whose bitcoin price index tracks prices from four major exchanges. This latest fall follows a series of setbacks for the cryptocurrency with a collapse across global mainstream markets adding to the selling. Today’s collapse comes just six weeks after bitcoin hit a record high of $19,511, fuelled by a flood of speculators looking to make a quick buck, with warnings it could fall another 50 percent.

On Monday, Nouriel Roubini, the man who predicted the 2008 US housing bubble said: “This (Bitcoin) is mother of all bubbles and it is also the biggest bubble in human history if you compare it to Mississippi bubble, tech bubble, and Tulip mania.”

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