India: Crypto-bill unlikely to make it to Parliament’s Budget session

While the crypto-industry in India is hopeful about regulatory clarity when Budget 2022 comes around, local media reports say it is unlikely that the bill will be introduced on 1 February.

AMBCrypto spoke to CREBACO’s Sidharth Sogani to understand where the bill is at right now. According to the exec, the bill is unlikely to make it to the Parliament during this budget session as it “is not ready yet.” He went on to add, 

“If the bill is prepared, it gets approved by the Cabinet and then it goes to the Parliament. So we have no information of the bill being presented to the Cabinet yet.”

Local media reports also suggest that the government needs more time to conduct discussions on the complex topic of cryptocurrencies and DeFi. Last year as well, the much-awaited crypto-bill didn’t make it to the house during the Winter Session of the Indian Parliament that kickstarted on 29 November and concluded on 23 December. It was the second time the bill was pushed ahead. 

However, the government might touch upon crypto-taxation this time around, as per Sogani. He argued,

“Most probably in the budget we will hear about taxes–direct and indirect taxes would be addressed by the finance minister. So I believe that the ambiguity in with the exchanges, which the tax departments had last month, that would be resolved.”

Over the past few months, major cryptocurrency service providers have been under investigation in India on suspicion of possible tax evasion. WazirX, for instance, was pulled up for alleged evasion of 400 million rupees in goods and services tax (GST). 

In light of cases such as these, Sogani expects,

“Issues like long-term capital gain tax, under what heading it should be, you know, shown in the books of accounts of companies and individuals. Also, the GST, the percentage, all those things will be clarified.”

The reason to only include certain aspects of the regulation, according to Sogani, is,

“In order to do that, you don’t need to make a bill. It can be introduced with notifications.”

There is also chatter that the government might levy TDS or tax deducted at source and TCS or tax collected at source on the transactions associated with cryptocurrencies. Reports note that a consensus on the policy will be achieved before notifying it. 

In this regard, start-up group IndiaTech had also written to Finance Minister Nirmala Sitharaman to clarify rules by introducing additions to the existing laws, ETtech had reported. That being said, some reports have cited sources which revealed that the government has already got in tax experts to frame disclosure and taxation guidelines for companies and family offices dealing or holding cryptos.