The Indian government has introduced new rules for the disclosure of cryptocurrencies. Cryptocurrency companies will be required to provide a compliance statement from 1..2004. April as part of their financial statements disclose, among other things, their holdings of cryptocurrencies.
New cryptographic disclosure requirements
Last week, India’s Ministry of Corporate Affairs (MCA) issued a notification requiring companies to disclose exchanges of and investments in cryptocurrencies during the financial year. This information will have to be disclosed from April 1, i.e. from the beginning of the Indian fiscal year 2021-22.
Any entity that has traded or invested in cryptocurrencies or virtual currencies during the financial year must disclose the profit or loss from transactions in cryptocurrencies or virtual currencies, the amount of currencies held at the reporting date, and the deposits or advances made by persons to trade or invest in cryptocurrencies or virtual currencies.
Cryptocurrency companies in India have welcomed the government’s new demands, believing they will legalize cryptocurrency transactions. Monark Modi, founder and CEO of Indian cryptocurrency exchange Bitex, was quoted in local media as saying:
Given the recent speculation surrounding the ban, allowing cryptocurrencies into accounts will certainly come as a relief to investors as they will no longer have to worry about taxes.
He added: This is a clear confirmation and it is good to see that India is keeping pace with the global race for cryptocurrency. It would be good to introduce regulations that ensure investor safety, consider tax factors and encourage trading of cryptocurrencies as an alternative asset class.
The Indian government is currently working to finalise the crypto currency bill, which would be tabled during the budget session of parliament. By the end of the session, however, no bill on cryptography had been introduced.
The finance minister gave some hints about what might be in the crypto currency bill. She said the government would not cut off all options and would take a calibrated position on crypto currency legislation. Meanwhile, the central bank, the Reserve Bank of India (RBI), has said it has raised some serious concerns about cryptocurrencies with the government. However, RBI chief Shaktikanta Das believes that the government and the central bank have reached an agreement on cryptocurrencies.
Do you think the new disclosure rules for cryptocurrencies will benefit the industry? Let us know your comments in the section below.
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