Experts Advocating For Bringing Cryptocurrency Bill
Experts advocating for bringing Cryptocurrency Bill said – to get the government passed in the budget session itself.
Finance Minister Nirmala Sitharaman is expected to present the budget on February 1 and experts have also called for regulating cryptocurrencies and rationalizing taxes, recognizing them as a capital asset.
The sector has grown rapidly in the past few years with the buying, selling of digital currencies and the legal establishment of cryptocurrency exchanges in the country.
But the government has not yet brought any law to control this area.
Earlier it was expected that the government would introduce a bill called The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 to regulate cryptocurrencies in the winter session of Parliament.
Experts advocating for bringing Cryptocurrency Bill: It is now expected to be introduced in Parliament during the budget session.
Prateek Gauri, CEO, and Founder, FiveEar, said that it is the responsibility of the government to protect people from risky investments.
but risk-taking is the right of every investor and the investment and the parties stay together in this balanced endeavor.
He said that let it be the trend has never worked in a country where every rupee is hard-earned and we are a country of hard workers.
Even in the matter of administration, the central government seems to be serious about accountability.
So taxation and regulation of investment come under its purview and I think so far the government has done a remarkable job of balancing the need and restriction to encourage investment for innovation.
He added that all profits from cryptocurrencies are heavily taxed around the world and that taxing gains in crypto markets is part of the puzzle.
Prime Minister Narendra Modi, while addressing a summit of the World Economic Forum in a virtual manner on January 17, called for a coordinated global action to regulate cryptocurrencies.
The Reserve Bank of India has publicly supported the banning of private cryptocurrencies. The crypto assets in India are currently estimated to be around Rs 45,000 crore with around 15 crore investors.
The risk in the widespread adoption of crypto is that there is fraud in the crypto exchange market.
There is no need to be overly cautious on crypto exchanges or ATMs at this time.
Raj Kapoor, Founder of India Blockchain Alliance and Chief Development Officer of ChainSense Ltd, said that better compliance with the FATF framework will provide clear support to crypto as well.
This will make it ready to be used for risk assessment and reporting of procedures.
Customer Due Diligence (CDD) scanners will be put in place to specifically scan high-risk customers to trace the identity of the customer.
Ravi S Raghavan, associate, tax and private client group at Mazumdar & Partners, says crypto should be treated as a capital asset and with a fair tax regime.
This includes levying 18 percent GST on fees collected by exchanges to enable them to buy and sell crypto whether investor profits will either be taxed or other measures.
He said that to avoid any tax litigation, it has to be included in the income tax return reporting procedure and imposition of tax withholding as a frequently asked question by the Central Board of Direct Taxes.
He added that crypto trading should be treated as a speculative transaction by the government.
Any loss arising out of crypto sales should not be allowed to be carried forward and set off against other business profits or salary income of the taxpayer concerned.
Regulating cryptocurrencies by bringing them under the Income Tax Act will make them a part of investment options.
Most investors have no problem with taxation and want clarity and consistency of taxes.
Whatever is banned never goes away, it just gets hidden and the government misses out on tax revenues, said Kunal Verma, Creative Head, and Director, Unometa Pte Ltd.
Regulating it would ensure that all loopholes are removed and people do not feel the need to evade taxes.
