Central Bank of the country (RBI) published a notice in which it pointed out “customer protection related to security risks” when using cryptocurrencies. This led to a rush among investors to sell their coins. Many people fear that once they have money in their bank accounts, they will have to pay taxes. Depending on whether cryptocurrency is treated as business income or capital gains, the return could attract up to 20-30% tax. 

A special amendment to the income tax law is not required to tax BTC. A 20% long-term capital gains tax may be charged if coins are held for at least 3 years. Short term benefits will pay 30%. However, while BTC is not considered illegal in India, it is not legal either. It is this ambiguity that has led the Supreme Court of India to ask the government to issue clear guidelines regarding the use of "regulating the flow of BTC in the country."

Source: chainb.com