The cryptocurrency industry in India is a rapidly growing one, but it also one that’s plagued with uncertainties currently since the government is yet to clarify its stand on it. With the Cryptocurrency Bill expected to be brought up during the Budget announcements this year, companies are hopeful that crypto should be classified as assets and regulated.
"At a time when the nascent yet rapidly-growing crypto industry in India is tiding through a lot of uncertainty and volatility, the upcoming Union Budget should focus majorly on regulating the sector by classifying cryptocurrencies as an asset class for India and providing regulatory clarity in terms of tax applications for them,” said Om Malviya, President, Tezos India.
Since crypto is being considered to be a threat to the financial structure, one of the only ways to dismantle that would be to create a regulatory body that overlooks both the cryptocurrency and the blockchain players.
“This, in turn, is bound to give a boost to the realisation of its vision of ‘Digital India’ without crypto being seen as a threat to existing financial and banking structure of our country,” Malviya said.
“Given the immense economic and job creation potential of blockchain technology and Web3, pushing a few future-ready proposals and incentives for R&D and product development around public blockchain-oriented use-cases such as NFTs, smart contracts, Defi etc. will also be welcome,” he added.
“The crypto industry has been long awaiting the Cryptocurrency Bill, which is now expected in the Budget Session. The Bill is expected to detail out the regulatory considerations surrounding cryptocurrencies. In this year’s Budget, we expect the government to make key changes to the Income Tax Act, 1961 with regard to the taxability of cryptocurrencies in India. This would also clarify the applicability of GST on trading and brokerage activities,” explained L Badri Narayanan, Executive Partner, Lakshmikumaran & Sridharan Attorneys.
“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),” Narayan added.
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