The govt. takes strict action against 11 crypto currencies exchanges for defaulting:
Mr Pankaj Chaudhary, the minister of state for Finance, in a written reply to Lok Sabha on 28th March, said that the government has taken necessary steps against 11 crypto currency exchanges (In India) for tax evasions to the tune of Rs 81.54 crore. After the penalty charges and the interest accrued the amount goes up to Rs 95.86 crore. When the MoS was asked if the firms were also involved in eluding the GST (Goods and Services Tax) he said that there were a few cases that were uncovered by central GST.
There is obscurity on aspects relating to the govt. proposal for taxation policy from trading:
The experts have opined that despite the government’s proposal for a taxation policy, 2 months back, for income from trading in VDAs (Virtual Digital Assets), there is obscurity on many aspects. As per the founder of 5ireChain (a blockchain ecosystem), Pratik Gauri, the piecemeal developments and wavering clarifications show that the government is feeling its way (through the subject of crypto regulation), and with little precedent to go by, it is trying to understand the various challenges and tasks it might face in the implementation aspect once the regulations fall in place.
The govt. elucidated that the loss incurred from the transfer of VDAs cannot be set off against gains from another VDA:
In the Govt. budget on February 1st, 2022, proposes that the income from the transfer of any VDAs (Virtual Digital Assets) will be taxed at 30 percent, it said that except the cost of acquisition there will be no deduction of any expenditure or allowance will be allowed when calculating such income. On March 21st the govt. elucidated that neither the loss incurred from the transfer of VDAs be set off against gains from another nor can the mining costs be considered as acquisition costs for deduction of taxes.
Experts opine that the tax provisions have legalized crypto trading:
Although the fact that contentious issues like, if digital assets are legalized or not, experts opine that the tax provisions have legalized crypto trading. Having said that the Finance minister reiterates that taxing digital currencies does not mean to say that it has been legalized. All of us have to wait for the government’s decision in this matter. With respect to the govt. proposal on March 24th, 2022, by disallowing the losses incurred on one VDA with gains from other VDA. According to the amendments to the Finance Bill 2022, the finance ministry went ahead and removed the word “other” from the section relating to the set of losses from gains in VDAs.
The govt. is contemplating to remove the Rs 50k penalty and the 6-month imprisonment:
The govt. is trying to regulate the crypto currencies however there has been no draft released in this regard. The amendments seek to do away with the Rs 50k penalty and the 6-month imprisonment thus diluting the penalty provision relating to the publication of import-export data.