I have been reading a lot about taxation of bitcoin earning, regulation by RBI, opening of ATM's etc. However, I would like to make people aware that buying or selling bitcoins, in cash, can really land that person in hot soup.
All the miners and bitcoin traders must be aware that buying/selling of bitcoins in hard cash can really trigger the surveillance of government authorities on their head. The buying and selling of bitcoins, both way transaction, has to be carried out through legitimate mode. Even if buying or selling of bitcoins is carried out by change of cash, then the same can get under the radar of goverment authorities. Certain sections in Prevention of Money Laundering Act are strongly worded and as per the wordings of these sections a person can get into problem with authorities if found dealing in cash. However, if the person can show the inflow or outflow of cash through means of his Income Tax Return then it will be ok.
The basic reason of concern for any government to accept bitcoin as currency is that they are concerned for money laundering activities through selling of bitcoins. The Money Laundering Act has taken a huge leap in past 5 years and there has been numerous cases in which even when funding is not for terrorist activities the government has taken action.
If the miners are selling their mined bitcoins they should accept payment through cheque or net banking and if in cash, they should reflect the same in their I.T. returns.
Lastly, there are numerous other related acts in which an exchange needs to be cautious about. I cannot write everything here but I hope this post helps majority of people of this forum.
Regards
--
Kanishk Agarwal
Advocate
CriTaxCorp
Criminal-Taxation-Corporate
www.critaxcorp.com+919971666252
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