There was no discussion on the bill even during the winter session of Parliament held on December 22 last year, although Finance Minister Nirmala Sitharaman had earlier said that a “considered” bill would come soon and it would be brought to Parliament after cabinet approval. will also be introduced in But a recent report by Coindesk suggests that Parliament is willing to give itself more time to discuss it above and build consensus on the regulatory framework.
However, based on a lot of information about cryptocurrencies in India over the past year, there are a few things we can expect from the government.
Taxation of cryptocurrency holdings
Crypto market insiders, investors and traders are anticipating the introduction of a fair tax policy for crypto earnings in the upcoming Union Budget 2022, although this is likely to form only a part of the final bill.
While the upcoming regulation may not bar Indians from cryptocurrency-related activities, the government may impose taxes on them. Buying and selling cryptocurrencies can be included within the scope of reporting in the Statement of Financial Transactions (STF), just as trading companies typically report the sale and purchase of shares and mutual funds.
The government can also impose a higher tax rate on the profit earned by an individual or entity from cryptocurrency trading. Here the tax rate can be 30 percent, which is similar to profit from lotteries, game shows etc. If this happens, those trading in cryptocurrencies will have to pay tax from the proceeds from the sale of the digital asset.
The bill may also allow the Securities and Exchange Board of India (SEBI) to regulate cryptocurrencies as a capital market investment instrument.
Waiting for RBI to pilot its CBDC
It seems that the Indian government has made up its mind to impose regulation, but at the same time, in view of the rapidly developing technology, it also wants to create more discussion and consensus on this topic. At the World Economic Platform Forum’s virtual summit on January 17, Prime Minister Narendra Modi called for simultaneous global action to regulate cryptocurrencies, while emphasizing that any single country The efforts made may not be enough.
However, the Reserve Bank of India has plans to launch a Central Bank Digital Currency (CBDC). According to a report in The Hindu, the Reserve Bank of India had decided to operate a simple CBDC model and learn how to build a more complex CBDC from it.
Now, a digital currency or CBDC is issued by the government or central bank. Unlike cryptocurrencies, digital currency is more stable and backed by authorities. Cryptocurrencies and stablecoins are decentralized, which cannot be the case in digital currency issued by the country.
A virtual cryptocurrency offers better privacy than mainstream digital payment methods, which are used by terrorists, according to a study report by the Financial Action Task Force (FATF), an intergovernmental organization set up to combat money laundering and terrorism-related financing. Can be done for wrong activities by organizations and criminals.
Most importantly, because cryptocurrencies are decentralized, central banks will not have their most essential functionalities to control the money supply in the economy.
The crypto bill proposed by the Government of India regarding cryptocurrencies can bring stricter rules for crypto in India, including the provision of jail for those who violate the law. Reuters reported this on Tuesday, citing an undisclosed source and the draft bill.
Proposal to impose imprisonment and fines for violation
A Bloomberg report published in early December, citing a draft bill awaiting approval by the cabinet, suggested that the government could invest in digital currencies by anyone mining, generating, holding, Sailing plans to ban all activities on, (or) dealing”.
The introduced bill is unlikely to be introduced in the upcoming budget session, the report said, but the report noted that individuals found violating crypto could face arrest without a warrant, which would be May be “non-bailable”.
According to the report, India’s capital market regulator – SEBI may become a regular for crypto assets. According to previous reports, violators of the exchange provisions could face a fine of $2.65 million (approximately Rs 20 crore) or even a prison sentence.<!–
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