The Paramountcy of technology was set into motion with the advent of internet. Cryptocurrencies are progeny of such technology and internet. The public's adoption and use of cryptocurrencies has skyrocketed in the last decade.
Cryptocurrencies like bitcoin are virtual currencies which function in a peerless network thereby eliminating the need for intermediaries. Its specific technological features, combined with a lack of regulatory guidelines, generate significant tax complications. Although there is still a lot of misconception as to taxation of cryptocurrencies, countries all over the world has begun to note the issues involved and have started to implement the necessary measures to curb tax evasion.
In case of India, The Blockchain technology opens up the realm of secure digital transactions in state. The Indian population has also shown significant interest in virtual currencies which is evident from the increasing number of investors and owners of crypto-assets in the country. Initially Indian government was unwelcoming of such crypto investments and trading owing to its ambiguous decentralised nature. There was even an umbrella ban on usage of cryptocurrency in the country. But with the advent of COVID-19 pandemic, investments in these virtual assets have taken over the global market like a tsunami, making cryptocurrencies an indispensable part of global as well as national economy. This had compelled the Indian government to step in and regulate the crypto market in order to ensure the economic growth of the country in par with other countries. The Indian government recently tabled a bill before the cabinet to regulate the crypto assets in the country.
With things turning up better for development of cryptocurrencies in India, this paper deals with taxation issues in the crypto currencies and the complications involved among various stakeholders. It also provides an analysis of measures adopted by other countries which could help in framing an effective policy for taxing cryptocurrency in India.