With Indian Government demonetization action, the volume of Bitcoins being traded has substantially increased since its inception.
Lets understand the concept of Virtual Currency. Virtual currency is a digital representation of value that functions as a medium of exchange, a unit of account, and/or a store of value.
Bitcoin, the scorching hot cryptocurrency is one of the example of convertible virtual currency. It was created in 2009 by an unknown person using the alias, Satoshi Nakamoto.
Bitcoin can be digitally traded between users and can be purchased for, or exchange into U.S. Dollars, Euros, and other real or virtual currencies. It does not have a legal tender in our jurisdiction. Even if bitcoins were not regulated by RBI, income earned from it needs to be declared and tax to be paid on the same.