INSUBCONTINENT EXCLUSIVE:
Union Budget 2022: India is closely waiting for clarity on crypto lawsNew Delhi: Over the last few years, India's cryptocurrency sector
has grown at an exponential rate
There is currently no law in the country that supervises or regulates cryptocurrency trading
Buying, selling, or trading digital coins, as well as establishing a cryptocurrency exchange, are all legal in India.Given the risks
associated with cryptocurrency trading, there was speculation that a bill would be introduced in the Winter Session of parliament, which
would either ban or regulate digital assets
That bill, however, was not introduced
The government is now likely to introduce the crypto bill in the Budget session, which starts on January 31 and ends on April 8.If Indians
are not barred from dealing in cryptocurrencies, the government may impose a tax on them
The government may contemplate levying TDS (tax deducted at source) and TCS (tax collected at source) on the sale and purchase of
cryptocurrencies beyond a specific threshold
In case that happens, it will help the government know and track the investors.Buying and selling cryptocurrency could be included under the
ambit of reporting in the Statement of Financial Transactions (SFT) like trading companies usually report the sale and purchase of shares
and mutual fund units.Union Budget 2022: Given the risks associated with cryptocurrency trading, there was speculation that a bill would be
introduced in the Winter Session of parliamentIn case that happens, the tax authorities can use the statement to collect information on
specific high-value transactions that a person carried out during the year
The individual is obliged to include details of specified financial transactions or any reportable account that they registered, recorded,
or maintained during the year in the statement.The government can introduce a higher tax rate for gains made by an individual or entity from
The tax rate here can be 30 per cent, which is similar for gains made from a lottery, game shows, puzzles, etc
If that happens, those trading in cryptocurrencies would have to pay taxes from the income arising from the sale of the digital assets.The
bill may also allow the Securities and Exchange Board of India, or SEBI, to regulate cryptocurrencies as a capital market investment
In this case, there will be more stability in terms of institutional regulation and when it comes to understanding digital assets better
Investors will be able to diversify their asset portfolios by treating them as an investment instrument.The bill might also functionally
categorise different cryptocurrency businesses - exchanges, wallet token issuers - and impose varying tax responsibilities on them
To put it another way, different stages of cryptocurrency operations will be taxed differently, from mining to trading to liquidation.From
the point of view of economic recovery, the Union Budget 2022 is very important
Developing and enabling a forward-thinking regulatory framework with respect to cryptocurrencies can play an important role in the process.
