Cryptocurrency Income Tax, Other Changes Investors Can Expect

Budget 2022 expectations: The 2022 Union budget is just days away, with the government announcing that Finance Minister Nirmala Sitharaman will present this year’s budget to Parliament on February 1. The budget session will begin on January 31 and will be held in two parts. Before the start of the budget session, business sectors across India put forward their demands and expectations from the government regarding the new rules. This year, the cryptocurrency industry, which has recently come under scrutiny from the Center and the Reserve Bank of India, has presented its speculations and expectations from the government amid talks. on introducing a Cryptocurrency Regulation Bill to Parliament.

Experts demanded to consider cryptocurrencies as an asset class and expected a new rule for the same in the 2022 Union Budget.

“The industry awaits official communication on the proposed Crypto Bill. We believe regulatory clarity will bring clarity and encourage more Indians to start their crypto investment journey. We expect the regulatory framework for investing in crypto-assets to focus on four main areas,” said Ashish Singhal, Co-Chair of the Blockchain and Crypto Assets Council and Founder and CEO of CoinSwitch Kuber.

Singhal listed the four main areas of concern which are Crypto classification, regulatory framework, KYC standard and regulator. He said, “Crypto should be classified as an asset. It is similarly regulated in many other countries, and almost all crypto use cases are investment, not payment. set up, Singhal said.

“In the upcoming budget, we expect the government to consider levying TDS/TCS on the sale and purchase of cryptocurrencies. This may be a turning point for the crypto industry. government will consider changing income tax laws to tax cryptocurrencies – which should be taxed above a certain threshold, and such transactions can be incorporated as part of specified transactions for purposes of income tax return,” said Vikas Ahuja, BACC member and CEO of CrossTower India.

“Additionally, we also expect the bill to research and promote the ‘official digital currency’ which will be issued by the central government and the RBI and will likely be referred to as ‘crypto-assets’ rather than ‘cryptocurrencies’ – considering it as an emerging asset,” he added.

According to Om Malviya, Chairman of Tezos India, the industry is currently facing great volatility. “At a time when the nascent but rapidly growing crypto industry in India is going through a lot of uncertainty and volatility, the upcoming Union budget is expected to focus primarily on regulating the sector by classifying cryptocurrencies as an asset class for India and providing regulatory clarity in terms of tax demands for them,” he said in a note to News18.com.

“Furthermore, the deployment of a comprehensive self-regulatory body or group for and players in the cryptocurrency and blockchain industry may also be considered by the government – ​​which in turn is required to give a boost in realizing his vision of ‘Digital India’ without crypto being seen as a threat to the existing financial and banking structure of our country, he added.

The government was about to introduce a new bill regulating cryptocurrencies during the winter session of parliament, but it didn’t go as planned. “Finance Minister Nirmala Sitharaman previously said the cryptocurrency sector can no longer be ignored. The Supreme Court of India had struck down the ban previously imposed by banks on cryptocurrencies. This suggests that the sector could be heading for a gradual boost during this budget,” said Edul Patel, CEO and co-founder of Mudrex.

“The government had said it could categorize cryptocurrencies based on use cases. This would also help with the tax aspect. The sector would do better with progressive government regulation,” he added.

However, Kumar Gaurav, CEO of Cashaa, said there is no way for the government to ban cryptocurrencies. “They can certainly prohibit the legitimate use of crypto, which will only make it harder for an ordinary person who doesn’t understand what they’re getting themselves into. However, what we understand is that the Indian government is trying to crack down on the scams going on. on behalf of Bitcoin,” he said.

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