Indian Government made its first regulatory move on Bitcoin & other cryptocurrencies make it requisite for all organizations to reveal their virtual currency dealings in their balance sheets. The regulation was passed by the Ministry of Corporate Affairs (MCA). The measure is likely to augment the cryptocurrency dealings in India & is anticipated to bring more transparency between Government & investors. According to the regulations, the firms will have to unveil loss or profit of transactions involving cryptocurrency & holding amounts. They will have to share the deposits or advance details from any person to invest or trade in cryptocurrency. MCA quoted the revisions have been made to Schedule III of the Companies Act 2013 & will be pertinent from the forthcoming financial year.
The decision comes during govt proposals to control cryptocurrency in India or enact an inevitable transaction ban. The CEO of BuyUcoin - Shivam Thakral said, "This is a primary measure towards the regulation of crypto assets in India & will bring a lot of transparency in filling or reporting crypto investments. The measure will enhance the institutional adoption ofcrypto assets in India & take the Indian crypto sector to the next-generation growth. Indians have already invested around $1.5B in cryptocurrencies, clearly showing their target towards embracing digital assets."
Around 7 Million investors have deposited $1 Billion in cryptocurrencies in India, making it cumbersome for the govt to enact a ban but more regulations that provide RBI better control. Founder & CEO of Cashaa - Kumar Gaurav quoted, "With this measure, the govt has ensured that in worldwide scenarios wherein tech giants like PayPal & Tesla are actively taking part in the crypto domain, the Indian firms aren't falling back. Also, furthermore, all the trading volumes by the Indian firms go into massive accounts."
There are numerous challenging theories regarding what the original order will be, from a directive to a complete ban. The Govt has asked for revealing that it looks like a control rather than a ban on crypto assets. These are still the earlier stage & the most crucial directive is yet to come, added G.V. Anand Bhushan, partner, Shardul Amarchand Mangaldas.
Despite the MCA official order for firms to hold & report crypto assets in their balance sheets, experts believe that there is still a discrepancy on how these will be taxed. Partner at CNK RK & Co. CA - Pallav Narang says whether it is going to capital gain or taxed as business or speculative income, it still has to be verified. This information will undoubtedly be searched by the income tax authorities to validate whether people are paying taxes on a particular income or not. The Govt's target seems to include & control cryptocurrencies.
Tesla's Significant Move
The decision came days after Elon Musk, CEO of Tesla, revealed that the car manufacturer will now accept Bitcoin as the payment mode. In a tweet, Mr. Musk stated that a Tesla could be bought with Bitcoin, making it the first significant automaker to begin accepting Bitcoin payments in exchange for its products.