Bitcoin may attract 30 per cent tax

Tax experts believe that gains from Bitcoin should ideally attract capital gains tax, although the taxman would need to consider it has a new asset class. With the government already in the budget drafting mood, it is hard for the exponential gains from Bitcoin trading to escape taxman's scrutiny.

Under the current taxation rules, tax experts calculate 20 percent long-term capital gain tax on bitcoins held for at least 36 months, while holding bitcoins for a lesser period should attract short-term capital gains tax at 30 percent.

Meanwhile, on Sunday (US time) January bitcoin futures contract was listed on the Chicago Board Options Exchange (CBOE) at US$15,640. The bitcoin futures breached US$18,000 in the first hour of trade, the website was also down due to heavy traffic and the exchange halted trade twice after 20 per cent upward rallies.

The Indian government is planning an expert panel to decide on its future course of action on the use of bitcoin and other virtual currencies, reported news agencies.

In a release on December 5, the Reserve Bank of India (RBI) drew the attention of investors to its advisories issued on December 24, 2013 and February 1, 2017 that users of cryptocurrencies (virtual currencies) including bitcoins regarding the potential risks associated in dealing with such currencies. The central bank also reiterated that it has not authorized, licensed any entity to operate or deal with bitcoin or any digital currencies.