A new statement has shown the keen interest of the Indian Government to add Cryptocurrencies to tax laws. The effect will come after the amendments in Section 26A of the Income Tax Act and the Annual Information Regulation (AIR).
The government of India has published a statement after the publishing of a note on the Cryptocurrency Bill 2021. The statement says that the government plans to make amendments to Section 26A of the Income Tax Act. The amendment will include the terms related to virtual currencies such as ‘Cryptocurrencies’.
This statement has come after much wait and speculation about the future of Cryptocurrencies. While the government had initial plans of banning the currencies entirely. They opted to regulate them instead. Additionally, The regulating body SEBI (Security and Exchange Board of India) will act as the regulating body for Cryptocurrencies as per the note by the Government.
What will be the amendments?
The provision is to include Crypto words like Cryptocurrencies, Crypto-Assets and Digital Currencies in specific parts of the Income Tax Act of India. This means that, while filing for tax returns a person has to show his earnings from Cryptocurrencies.
The parts that are expected to amend are section 26A of the Income Tax Act of India and the Annual Information Regulation (AIR). The AIR logs data on all the investments that a person makes and is often referred to as a ‘tax passbook’.
Although, as of now there’s no definition of Cryptocurrencies in the Tax laws. Hence, the government cannot legally ask banks for data on transactions related to Cryptocurrencies. However, this will change once Cryptocurrencies get a well-defined definition in the Tax laws of India.
The authorities also plan to modify foreign asset disclosure norms such that citizens will have to reveal whether they own cryptocurrencies abroad.
The two amendments are separate from the Bill on cryptocurrencies. However, expectations are that the bill and the laws will complement each other in practice.
The Indian Government is about to add Cryptocurrencies to the tax laws of The nation. With this news, the confusion about the uncertain future of Cryptocurrencies is clearing. Hopefully, you liked this article. If you wish to read more about them, do visit our website.