Cryptocurrency to be reported in Schedule III - Companies Act
Something interest is happening. While the Government has been sending mixed signals on Cryptocurrency and the Crypto ban, MCA has made a silent amendment asking Companies to disclose their holding and gains from Cryptocurrency.
In a recent circular issued by the Ministry of Corporate Affairs, the Government has now added the following requirement:
Details of Crypto Currency or Virtual Currency Where the Company has traded or invested in Crypto currency or Virtual Currency during the financial year, the following shall be disclosed:- (a) profit or loss on transactions involving Crypto currency or Virtual Currency (b) amount of currency held as at the reporting date, (c) deposits or advances from any person for the purpose of trading or investing in Crypto Currency/ virtual currency.
Now the question obviously is this - Is this a clamp down? Or is the exact opposite - Is this just a disclosure requirement and the Government finally accepting crypto?
We're still waiting on clarity from the Government on what the new Crypto law will be.
Update on Crypto taxation:
If you own Cryptocurrency, you really should know the tax implications. Check out our article on the subject here.
MINISTER OF STATE IN THE MINISTRY OF FINANCE (Anurag Singh Thakur) on 23 March 2021 said the following:
Irrespective of the nature of business, the extant statutory provisions on scope of total income for taxation as per section 5 of the Income-tax Act, 1961 envisage that total income shall include all income from whatever source derived, the legality of income thus being of no consequence. The gains arising from the transfer of crypto currencies/assets is liable to tax under a head of income, depending upto the nature of holding of the same.
He also went onto add the following:
No data is maintained on cryptocurrency earnings of Indians as there is no provision in the Income tax return to capture data on earnings arising from crypto currencies/assets.
Unfortunately, problem is that all crypto exchanges seem to be maintaining the data suo moto. The Government may decide to use this data in the future, we can't be sure of this.
However, this does give hopes to a lot of Indian crypto investors for moving their assets in case of a ban.
On GST, Shri Anurag Thakur added:
Supply of any service, if not specifically exempted, is taxable under GST and no service related to cryptocurrency exchange has been exempted. Further, Service Accounting Code (SAC) are headings containing broadly a number of economic activities and there being no specific SAC for cryptocurrencies, the GST collections specific to cryptocurrencies are not available.
Confused about what all this means for you or your Company? Reach out to us here and our team of Crypto Experts will help you out!