Govt rules implemented on crypto trading and crypto taxation; here is what’s in store!

After crypto trading have become popular in India, there has been an absence of strict regulatory framework and taxation process. But according to a Cryptocurrency exchange development company, concerned government authorities are planning to establish a standard rule for cryptocurrency trading. Crypto trading might now have no escape from paying taxes on the gains generated from cryptocurrencies.

How can the Govt respond to address issues with crypto trading and taxation?

As per a circular published by RBI in April 2018, the banking systems were barred to entertain any form of services to crypto-firms in India who were conducting robust trades through Crypto trading software. However, there is news circulating that the Govt of India might address issues regarding trades with virtual trades in the upcoming winter session of parliament.

Some of the key highlights of the initiative can be stated as –

•    The government of India will gradually proceed with the rules helping innovate virtual currency trades.

•    Cryptocurrencies listed by the Govt in the official digital currency bill 2021, but was not introduced for larger consultants.

•    A Govt panel setup in 2019 banned trades in virtual asset trades with Rs 25 crore fine and 10 years imprisonment.

However, there might not be outright ban on crypto trading by the Govt, as the virtual assets are very much capable of generating return on investment with high trade volume multiplying every day. Only after assessing the pros and cons of crypto trading, a presentation will be made on crypto trading and taxation. The policymakers are gradually proceeding with setting up rules and regulations for crypto trades, but will be done in a way that technological developments in the digital space is not hampered.

Can rules be implied on crypto trades and taxed?

It cannot be denied to the fact that crypto assets and Crypto exchange development is an entirely new concept, but there can be trading rules and regulations helping regulate trading in virtual assets and non-public information. Apart from trading, cryptocurrencies can be utilized as a medium of payment, but never been authorized and regulated in India. As of now, there are no set of rules and regulations or guidelines for crypto trading, which have led to risky transactions.

The concept of cryptocurrencies is still at the stage of infancy and is new to the Indian market as well. This is the reason why the Govt has not yet implied any rules and taxed crypto trades in the country. However, levy of income tax cannot be ruled out as the Indian Income tax laws have always strived to tax the income generated, irrespective of the mode through which it is received.

Legality of cryptocurrencies in India –

As depicted by a Cryptocurrency exchange development company, the Indian government have not till date granted any legal status to the cryptocurrencies and the trades. In 2018 RBI (Reserve Bank of India) tried to impose a ban on crypto exchange and had restricted any form of banking facilities to the cryptocurrency exchanges as well. But the good thing was that the ban was ruled out by the Supreme court of India on constitutional grounds and virtual currency exchanges fundamental rights. Furthermore, the Income Tax department has not even clarified anything on tax implications on the gains earned from crypto transactions.

Some of the virtual assets or cryptocurrencies like Bitcoin, Ethereum, Litecoin, and several others are a form of decentralized asset and function on blockchain technology by being connected to a network of super computers. As cryptocurrencies are attracting more and more attention of many traders, the government of India might plan to set some regulatory rules for Crypto trading in India.