According to both organizations, the government would be better off developing a positive framework for regulating and monitoring cryptocurrency usage instead of instating an outright ban.

Indian Income Tax Department Again Sending Notices To Cryptocurrency Traders & Investors

This is why Crypto needs positive regulations in India. Unsuspecting traders and investors are being dragged into the complexities of Income Tax assessment. pic.twitter.com/uXi6u3kzer

— IndiaBits (@indiabits21) July 30, 2019

Indian Tax Dept. Sends Notices to Cryptocurrency Traders

In its notice, the Indian tax department asked cryptocurrency traders and investors questions like whether they deal in Bitcoin or other cryptocurrencies, own accounts with virtual currency exchanges in India or abroad, and whether they are involved in the mining of Bitcoin or other cryptocurrencies.

This is not the first time that Indian tax agencies have sent out such notices. Earlier last month, income tax officials visited the offices of Indian cryptocurrency exchanges, including Unocoin and Coinome to reportedly collect information about cryptocurrency traders registered on the platforms. Following the visit, individuals with significant investments in the digital currency market began receiving summons and were asked to provide documents justifying their income.

In 2018, tax notices were sent to “tens of thousands of people dealing in cryptocurrency” after a survey showed that more than $3.5 billion transactions were conducted in over 17 months in the country. Similarly, in 2017, income tax notices were issued to high-income individuals to force disclosures of Bitcoin or other cryptocurrencies.

Indian IT Industry Body Opposes Cryptocurrency Ban

Nasscom, meanwhile, expressed their displeasure over the government’s inter-ministerial committee’s recent proposal that sought to ban and criminalize all virtual currency dealings in India. They said that a ban would hamper the development of related blockchain applications and prevent solutions from being deployed. It would also “handicap India from participating in new use cases that cryptocurrencies and token offers.”

They added that to address concerns, the government should create a regulatory framework that can be used to monitor cryptocurrency usage and prevent illegal activities from taking place. These regulations would enable law enforcement agencies to be better equipped to handle digital asset-related cases. They also asked financial regulators to launch ‘regulatory sandboxes’ that can be used by businesses to test out projects based on digital currencies

However, the body did praise the committee’s suggestions on the implementation of distributed ledger technology (DLT) in areas of finance and public services. They also urged the government to develop a federal digital currency and keep an open mind regarding the market as a whole.

Do you believe a ban on cryptocurrencies in India is likely, similar to China? Let us know your thoughts in the comments below.

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