Majority of exchanges have demanded clarity about the taxation over the income earned from the crypto assets and GST rules implemented on the trading platforms to ease the operations for all the parties involved
Industry players, at large, are not bothered with high rates on the new age investment, but are keen to get crypto to be classified as a legal assetNew Delhi: As the government’s focus shifts to the union budget, which will be tabled by finance minister Nirmala Sithraman on February 1, the crypto bill has taken a back seat .
That said, it is highly unlikely that the crypto industry will go unnoticed by the Finance Ministry. Domestic exchanges have some major demands they wish to be acknowledged by the government.
Majority of exchanges have demanded clarity about the taxation over the income earned from the crypto assets and GST rules implemented on the trading platforms to ease the operations for all the parties involved.
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Industry players, at large, are not bothered with high rates on the new age investment, but are keen to get crypto to be classified as a legal asset, with detailed provision over tax deducted at source (TDS) and tax collected at source (TCS).
On the contrary, tax veterans believe that crypto income is likely to be charged at the highest tax slab, similar to winnings from lottery, game shows, puzzle and others.
Crypto exchanges believe a regularised environment will encourage more Indians to start their crypto investing journey, promoting financial inclusion in line with the government’s vision.
Sharan Nair, Chief Business Officer, CoinSwitch said that crypto adoption in India has increased, thanks to various macroeconomic developments in India and the world over the last year.
“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,” he added
India has been witnessing an economic recovery despite COVID-19 challenges. Regulatory clarity will give the crypto sector a boost, accelerate its growth and potential to contribute to our $5 trillion economy vision, said the industry experts.
Nischal Shetty, CEO, WazirX expects better clarity from the government on crypto taxation along with regulatory clarity. The Union Budget should present fine-tuned clarity on the crypto landscape, he added.
This would not only encourage institutional investments in the globally emerging segment but also open up job opportunities in the underserved markets.
“While the legal implementation still seems a while away, any initiative announced in the Budget would at least open a direct line of conversation on crypto classification as an asset class,” Shetty said.
A bill was expected to be presented during the winter session of Parliament to regulate cryptocurrencies. However, it was not introduced, and it is now expected that the government may take up this bill in the Budget session.
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.
“We expect the government to officially acknowledge the nascent crypto industry in India and pave the way for inclusion of the industry within the financial ecosystem,” said Sumit Gupta, co-founder and CEO, CoinDCX.
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, he added.
There is a lot of ambiguity regarding the taxation of crypto assets in India and we expect the government to define clear tax guidelines for the booming crypto industry in India.
Shivam Thakral, CEO, BuyUcoin said that TDS/TCS on sale and purchase of crypto assets will help in accurate reporting of crypto transactions to tax authorities. He has urged the government to classify cryptos as an asset class.
“We are looking for a business-friendly regulatory environment within which we can operate without any fear and investors can trade with confidence,” he added with an optimistic view on the union budget for crypto ecosystem in India.
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