Taxing of crypto gains – Ushering a new era of regulation
By Kumar Panda
India has seen rapid adoption of crypto or digital currencies for trading and investment purposes. However, there is an uncertainty on the legal status and dealing with the same by the residents. The Bill proposing a sweeping ban has been listed twice in the legislative business of Lok Sabha and while the draft bill is in the dock, the Finance Minister in Budget 2022 has announced taxation of crypto profits. It is pertinent to note that taxation of crypto currency as an asset class for income tax does not provide for an automatic recognition under the law. The wide definition and high tax rate can be a dampener and will also increase the cost of compliance for exchanges and other operators, and individual sellers as TDS @ 1% is to be deducted. The author however argues that the proposed taxation regime and the requirements under the Companies Act, 2013 are in line with the updated guidance for virtual assets issued by Financial Action Task Force, an inter-governmental organisation in October 2021. Elaborating on the new tax regime, the author also deliberates upon how different countries across the world are regulating and taxing crypto currency transactions. According to the author, the clarity in taxation may bring on board, corporates and individuals who could not foray into the sector due to regulatory uncertainty...
Notifications and Circulars
- SEBI – Listing obligations and disclosure requirements regulations amended
- SEBI broadens power of investigating authority under SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations
- SEBI stipulates additional conditions for offer for sale of issues
- Special Situation Funds – SEBI amends rules governing Alternative Investment Funds
- CSR report to be filed in new form CSR-2 for preceding year
Ratio decidendi
- Section 12(5) of Arbitration and Conciliation Act, 1996 reinforces ‘neutrality of arbitrators’ – Mandate to be followed – Supreme Court
- Unfair labour practices – Punishment of dismissal even after acquittal from criminal court when correct – Supreme Court
News Nuggets
- Suit by unregistered partnership firm is not barred if the specific contract is not in course of its business dealings
- Invocation of personal guarantee by single creditor enough to disqualify guarantor under Section 29A(h) of IBC
- Purchaser of goods/services can also be an operational creditor
- Mediation order and dishonor of cheque will not lead to extension of limitation under Section 9 of IBC
- Consumer complaints cannot be transferred to High Court
- Arbitration – High Court cannot enter into merits of claims under Section 37 of Arbitration Act
