Indian industry body for startups seeks crypto rules in upcoming budget session
The development comes a few days after news broke that tax agencies "inspected" workplaces of five giant cryptocurrency exchanges in the country and "recovered" more than Rs 84 crore ($11 million).
"It is complex for the Union Budget to lay down taxation clarity around crypto assets by formally naming them in tax laws," said a letter to India's Finance Minister by IndiaTech.org an industry body of startups including crypto exchanges. The group plays an active part in discussions about the policy framework to regulate crypto with the government and India's central bank. The Reserve Bank of India.
India's Budget Session is expected to start on Jan 31, the budget is going to be announced on Feb, 1 and the session is likely to last until at least the end of April.
India's crypto exchanges were recently "inspected" by tax agencies, "inspections" in which more than Rs 84 crore($11 million) was "recovered" and more is likely. One of the exchanges investigated, Binance owned WaxirX blamed an absence of clearness in the guideline for the matter. it's that lack of clarity the group seeks to address.
"We have just submitted the letter yesterday and the goal is for the government to think about the recommendations into consideration in the upcoming budget," Ramesh Kailasam, the President and Chief Executive of IndiaTech said that.
IndiaTech.org also suggested, "that there may not be the requirement for a Bill around cryptocurrency if existing provisions are properly amended/notified accumulating crypto assets and managed beginning with the upcoming in Union Budget."
india's draft cryptocurrency bill is still in the progress and most likely won't become law until the next year's Budget Session ends in April.
The group's recommendations include granting cryptocurrencies recognition as digital assets, enabling provisions in the Direct Tax Laws, and that indirect tax (GST or Goods and Services Tax) should be levied only on the platform fees of the exchanges, on the brokerage, or exchange charges (like it occurs in stock markets) and not on the transaction value."
The letter also seeks the introduction of a system to register Indian-founded cryptocurrency exchanges by giving the status of Authorised Dealers to them, it asked requested for setting up the necessary check and balanced including allowing only Indian founders to manage such businesses (at least ownership of 26% by Indian founders in Crypto exchanges.)
IndiaTech.org realistically sees the proposals getting implemented Kailasam said, "we have recommended a practical way forward which is double."Our white paper launched earlier was also in the same direction to address concerns and move towards a practical regulatory process."