CESL launches tender for over 5K electric buses The most likely tax position is that income on transfer of cryptocurrencies should be taxed as capital gains unless a seller is a trader by occupation, which later should be taxed as business income.NEW DELHI: The cryptocurrency bill may not be introduced in the Budget session of Parliament as the Centre needs more time to build consensus on the regulatory framework for these digital assets in India.The government is reportedly also waiting for the Reserve Bank of India to first conduct a pilot launch of its own digital currency.The crypto assets in India are currently estimated at around Rs 45,000 crore with about 15 million investors.The Budget Session will begin on January 31 and conclude on April 8.Finance Minister Nirmala Sitharaman will present the Budget on February 1.The crypto industry is hopeful the Union Budget will bring in regulatory clarity about the emerging asset class.
The government is planning changes in the income tax laws to bring cryptocurrencies under the tax net, Revenue Secretary Tarun Bajaj had recently told PTI.Crypto companies in India believe that India has the potential to emerge as a major player in the crypto market and wants the government to put in place a framework for large scale adoption of the same.”Today, leading crypto exchanges follow strict self-regulatory practices to ensure customer protection.We hope the upcoming Union Budget will bring in regulatory clarity and help standardize best practices, address misconceptions around this emerging asset class.We believe a regularised environment will encourage more Indians to start their crypto investing journey, promoting financial inclusion in line with the government’s vision,” said Sharan Nair, Chief Business Officer, CoinSwitch Kuber.Currently, there is no provision under the Income Tax Act for taxing cryptocurrencies.
The most likely tax position is that income on transfer of cryptocurrencies should be taxed as capital gains unless a seller is a trader by occupation, which later should be taxed as business income.” We expect detailed clarity on how the crrypto industry be regulated and an introduction to a tax regime that would be more fruitful.2021 was the most significant year in terms of how things shaped up for the crypto industry in India and as a crypto community.With a robust mechanism in place, 2022 would be the year of mainstream crypto adoption,”Gaurav Dahake, CEO & Founder Bitbns, a crypto exchange.
“Much clarity is required in the Budget 2022 on issues such as the treatment of capital gains or business income, classification as speculative income, allowability of set-off and carry forward of losses, and the applicability of deemed gift tax provisions.The Budget may introduce special income tax rates to tax profits from Crypto transactions and may impose conditions such as crypto purchase/sale transactions, which can be through recognized platforms/exchanges only.
It is also expected that the Budget may contain disclosure requirements in Income Tax returns for crypto holdings (in Indian or Foreign exchanges) by Indian residents,” said Harsh Bhuta, Partner at Bhuta Shah & Co LLP.” We wish for clarity regarding the taxation on buying and selling cryptos.Since regulations are the major hindrances to these currencies’ growth, optimistically looking towards progressive regulations,” said Edul Patel, CEO and Co-founder of Mudrex, a crypto investing platform.
“Taxing cryptocurrency investments as asset class will be the most viable option for the Indian government as per which if tokens are sold within 3 years of holding period, it will be taxed as STCG, if not then LTCG.Also, NFT transactions should be treated as an asset class,” said Abhinav Soomaney, Forensic and Crypto Expert.”The government may consider levying TDS/TCS on sale and purchase of cryptocurrencies above a certain threshold, and whether such transactions could be brought within the ambit of Specified Financial Transaction (SFT),” said L Badri Narayanan, Executive Partner, Lakshmikumaran & Sridharan Attorneys.
At the virtual summit of the World Economic Forum on January 17, Prime Minister Narendra Modi called for synchronised global action to regulate cryptocurrencies while the Reserve Bank of India has time and again said it is in favour of banning “private cryptocurrencies.” Sathvik Vishwanath, Co-Founder and CEO, Unocoin is not expecting anything amazing to come out of the Budget this time.”If at all, the income tax confusions may get cleared up,” he said.”Various governments from developed nations across the world have created the distinction between income generated from crypto as business income or long-term capital gains tax.For the benefit of millions of Indian investors who are invested in crypto, we hope there will be adequate clarification on whether or not the income qualifies as business income.Similarly, clear guidelines and an explicit inclusion of crypto assets, and their corresponding treatment in the current GST and income tax guidelines will be hugely beneficial to the many crypto businesses operating in the country as well,” said Manhar Garegrat, Executive Director – Policy and Special Projects, at CoinDCX.Facebook Twitter Linkedin EMail.
