Indian Tax Authority See 'Worry' in Bitcoin Trading, Investment

@xiti - Tax authorities in India have expressed fears of money laundering by investing and trading crypto diarrhea such as bitcoin.

As bitcoin awareness and adoption grows in India, there are concerns among authorities about potential abuses by tax officials and money laundering. According to the Economic Times, Indian tax authorities are worried that crypto power trading 'could be a forbidden flow channel and the movement of black money'.

The income tax authorities and Enforcement Directorate, a law enforcement and economic intelligence agency, are looking for significant investments to buy the crypto below after last year's unprecedented demonization attempt that left almost 90% of India's physical money deemed overnight.

A senior tax department official told the publication:

There is a problem with large investments flowing into this currency [bitcoin].

A 'Special Investigation Team' (SIT) on black money (laundering) - specifically appointed by the Supreme Court of India - reportedly drafted a report on what had been learned and even suggested 'curbs' in the trade.

"There are concerns about the way it operates ... Countless amounts of money can flow into this," an unnamed official was quoted as saying.

As reported by CCN in July, India's Supreme Court is demanding the government and the Reserve Bank of India (the country's central bank to examine the bitcoin transaction so as to guarantee it is not used for money laundering or terrorism financing.

Indian bitcoin industry remains unregulated after years of getting cold shoulders from authorities. Significant growth in both popularity and adoption prompted the government to form a virtual interdisciplinary currency committee to study and propose a regulatory framework for digital currency in India earlier this year.

Thus, the speculative result is to see Indian authorities regulate the country's digital currency industry, with a highly unlikely ban. This industry regulation also tends to coincide with the taxation of bitcoin adopters in the general population.