Cryptocurrencies are potentially looking at a new change in India as the government is planning on ‘defining’ it as per a report by Economic Times. It was suggested that the government of India was proposing a new bill to segment cryptocurrencies on use cases sources informed ET. This would be a first for cryptocurrencies as they have never been categorized by the technology used. However, the government’s focus, for the time being, is on the end-use of the asset for regulatory purposes the report mentioned.
This new bill is expected to outline the tax treatment of these digital assets and will define how they are classified in the book. It remained ambiguous as to whether the cryptocurrencies were considered currencies, commodities services or more equitable said the report. It eventually comes down to a matter of law, as the main concern with the ambiguity is in regards to how the asset is taxed or regulated. Till now, that has not been the case with cryptocurrency in India.
The first goal of the government in this matter is then to define the cryptocurrency sources told ET. It was also suggested that India should recognize crypto tokens as digital assets as opposed to a currency, while simultaneously clarifying the policies on exchange ownership parameters, KYC, accounting and reporting standards and so on, said the report.
It was also reported that only the cryptocurrency assets that were classified and defined by the government would be allowed to trade in India. The crypto coins would then be taxed accordingly. It was suggested that the government might apply a tax similar to the Security Transaction Tax (STT) going forward. In another line, these digital assets could also be subject to income tax if they are indeed classified as commodities. The income could be taxed as business income in the hands of the investors at the normal rates of income tax.
In the past the Reserve Bank of India had flagged the issue of cryptocurrency as it was not regulated nor did it have any prior framework in place. Having said that, this move by the government could be seen as a morale boost for Indian cryptocurrency investors. It could also see a rise in the spread of knowledge of the previously mysterious digital asset and could promote better investment opportunities.
While this does capture the attention of the industry experts, investors and crypto exchanges alike, one would have to wait and see what the new bill spells for crypto going forward in the country.
The global crypto market had seen some major fluctuations over the past few months. At present, the global market cap stood at $2.26 trillion, which was a 1.15 per cent increase over the day. The total crypto market volume over the last 24 hours was $131.49 billion, which pointed to a 2.52 per cent increase.
Bitcoin which is the leading crypto coin had a price of $49,927.54 on Friday. It maintained a market dominance of 41.51 per cent, although it did see a drop of 0.63 per cent over the course of the day. Other popular coins in the market include Ethereum, Cardano, Binance Coin and Tether.
Read all the Latest News, Breaking News and Coronavirus News here