India's budget for this year may give crypto a legal stance
At the start of every year, India's Finance Minister presents the Union Budget - a financial report detailing how India plans to spend during the coming financial year (Apr-Mar) and how the country will fund those expenditures. The budget this year needs to tackle a lot of issues. While the much-discussed "cryptocurrency bill" will not be tabled during this budget session of the parliament either, many are speculating that the government will legalize crypto in India by introducing taxation on cryptocurrencies in the budget.
The situation of crypto investors and exchanges in India is tricky, to say the least. There is no law to make crypto either legal or illegal in India. Therefore, anyone in India is treading a difficult path and the need of the hour is for crypto to be legalized in India so as to remove any regulatory risks.
With respect to the above, the Union Budget becomes extremely important. If taxation is introduced on crypto-assets - tax deducted at source, tax collected at source, goods & services tax, or capital gains tax - then that will legalize cryptocurrencies. This is what crypto industry players want from the government at this point. The % of tax levied is not important for them. Regulatory clarity is.
A number of crypto exchanges in India have received notices for tax evasion. The budget, if it implements taxes, will help exchanges avoid such scenarios in the future. Moreover, a legal standing will also help attract new investors.
Can the government address this issue in the coming budget? Well, financial incentives exist. However, on what basis will the government tax a product that isn't identified in India's constitution. A lot of legal experts are of the opinion that regulatory scrutiny can be tightened on crypto holdings during the budget session. Time will tell whether the government does address crypto-related ambiguities on February 01.
Taxation is great for the industry incumbents. However, while it has some positives for investors, the costs of buying and selling crypto will increase and profits will be taken away by the government. For now, I think just getting crypto to be legalized is most important for everyone and hopefully this budget can do just that.
Posted Using LeoFinance Beta
