Risks related to bitcoins being examined: MoS Finance

Minister of State for Finance P Radhakrishnan has stated that the financial, operational and security-related risks of bitcoins are being assessed.

In a written reply to a question in the Lok Sabha on Friday, the minister said that the role of operators trading in crypto currencies is being examined.

Radhakrishnan also reiterated the Reserve Bank of India's (RBI) warning to users, holders and traders of virtual currencies like Bitcoins.

Time and again, the increasing popularity of virtual currencies like bitcoins has been a cause of concern for the government, who has reiterated that these will not be considered legal tender in India.

Recently, Finance Minister Arun Jaitley in his Budget speech stressed that the government does not consider cryptocurrencies as legal tender, and will take measures to eradicate the use of crypto currencies for illegitimate activities.

"Crypto currency investors in India have to bear in mind that the government doesn't consider them legal tender," Jaitley announced in his Budget speech.

He further emphasised that the government will look to eradicate their usage for illegitimate activities, nothing about investing in them.

Furthermore, Central Board of Direct Taxes (CBDT) Chairman Sushil Chandra on Tuesday had clarified that money earned from bitcoins would be applicable for taxation.

"Those who have earned from Bitcoins would have to give tax. Their source of income would also be asked, and if they don't pay tax, action will be taken against them," Chandra told reporters here.