India: Crypto industry players hope for regulatory clarity in Budget 2022
After 2022 started with tax raids on crypto businesses in India, industry players are pushing for a bill in the upcoming Budget session. The session is scheduled for 1 February for the financial year 2022-23.
But firstly, local reports suggest that the industry wants taxation clarification. Sathvik Vishwanath, Co-Founder, and CEO of India-based trading platform Unocoin told the media that he doesn’t expect “anything amazing” from Budget 2022. But, he added,
“If at all, the income tax confusions may get cleared up.”
Meanwhile, reports cited sources that revealed that the government has got in tax experts to frame disclosure and taxation guidelines for companies and family offices dealing or holding cryptos.
Yashesh Ashar, partner at tax advisory firm Bhuta Shah & Co. told ET,
“There are companies and family offices that have several transactions during the year, and reconciliation becomes a really difficult process. Further, the set-off of losses from cryptocurrency transactions with other business income also requires clarity.”
We know that major cryptocurrency service providers are under investigation in India on suspicion of possible tax evasion. With Zanmai Labs’ WazirX recently pulled up for alleged evasion of 400 million rupees in goods and services tax (GST). In this regard, Nischal Shetty, CEO of WazirX said,
“Besides regulatory clarity, we expect better clarity from the government on crypto taxation. India has been witnessing an economic recovery despite the Covid waves. A regulatory clarity will give the crypto sector a boost, accelerate its growth and potential to contribute to our $5 trillion economy vision.”
The report also reiterated that the framework might bar companies from setting off “speculative” losses against regular business profits. However, it is worth noting that a lack of clarity is mainly on the back of the government refraining from giving crypto a definition so far. But, tax-related clarifications can be only something to watch out for before the Budget. As reports noted an expanded crypto bill is unlikely early next month.
Nevertheless, the crypto bill that didn’t make it to the Parliament’s table last year, is expected soon to bring an end to the industry woes. Some players even want the Budget to go beyond taxation and include crypto in governance.
Sharan Nair, Chief Business Officer, CoinSwitch Kuber told AMBCrypto that various macroeconomic developments in both India and the world have led to a rise in crypto adoption in the past year. In context to India, he explained that while “leading crypto exchanges follow strict self-regulatory practices to ensure customer protection.”
“We hope the upcoming Union Budget will bring in regulatory clarity and help standardize best practices, address misconceptions around this emerging asset class.”
With that, he endorsed ‘a regularized environment’ to encourage financial inclusion with crypto.