Trading volume hits $3.5 billion in India government sends tax notices

After the repetitive warning by the Indian government not to trade in cryptocurrencies as this is not a legal tender. The government has already announced that those who are investing in cryptocurrencies can invest at their own risk. Many governments around the world are discussing how to regulate cryptocurrency trading. In March the policymakers are expected to this matter at the G20 summit to be held in Argentina.

About $3.5 billion worth of transactions has been done during the last 17-month period as per the Income Tax Department of India. The government is saying that trading in digital currencies is similar to “Ponzi schemes”. 

The government has sent tax notices to those who are trading in digital currencies like Bitcoin, Ripple etc. They have to give capital gain tax on the earnings done through trading in digital currencies.

Bitcoin which is the worlds biggest cryptocurrency has increased about 1700 percent last year. There has been many ups and down in the digital currency markets in the recent weeks. This is due to the announcement the governments of Japan and China that they are going to regulate the trading in these currencies. Also, South Korea announced that they are considering to shut down its domestic virtual currencies exchanges.

The officials of Zebpay, which is India’s leading bitcoin exchange said that around 200,000 new users are adding every month. Zebpay co-founder Saurabh Agarwal said that “Many of our customers are treating digital currency like gold”.

The top banks of India have also suspended the bank accounts of many top Indian exchanges suspecting dubious transactions. The major banks are State Bank of India, Axis Bank, HDFC Bank, ICICI Bank and Yes Bank.

“The banks have not contacted the company or the promoters regarding the actions you have mentioned,” said Sathvik Vishwanath, promoter of Unocoin. “The banks have not contacted the company or the promoters regarding the actions you have mentioned,” said Sathvik Vishwanath, promoter of Unocoin.