Calls for crypto regulation from governments across the world are mounting as we step into 2022 but India’s cryptocurrency sector has been thriving in a rather legal grey area for quite some time now. The union government has been keen on introducing a cryptocurrency regulation, or a bill, but if recent reports are anything to go by, further delay is expected as the upcoming budget session of parliament that commences on January 31 is unlikely to offer any immediate regulatory relief to investors or other industry stakeholders.
The bill is already delayed as it didn’t get discussed during the winter session of the parliament that concluded on December 22 last year although Finance Minister Nirmala Sitharaman had earlier said that a “well-consulted” bill would be coming through and that it would be tabled in the parliament once the cabinet clears it. But a recent report by Coindesk reveals that the parliament intends to buy itself more time to hold more discussions and build consensus on the regulatory framework.
However, based on a mix of information that has come through over the past year and more, there are few things we can expect from the government, should the topic of cryptocurrency regulation come up over the upcoming budget session of the parliament which ends on April 8.
Taxation of cryptocurrency holdings
Crypto industry insiders, investors, and traders are expecting the introduction of a proper tax policy framework for crypto earnings in the upcoming Union Budget 2022 although that is likely to form only a portion of the eventual bill.
While the upcoming regulation may not bar Indians from dealing in cryptocurrencies, the government is likely to levy tax on them — depending on the classification of holdings as capital assets or a commodity. Should the government classify cryptocurrency as an asset class, levying TDS (tax deducted at source) and TCS (tax collected at source) on the sale and purchase of cryptocurrencies beyond a specific threshold…
