The 5 major Indian laws cryptocurrency investors should be aware of are enlisted here
There is no denying that the age of information and communication technology has given rise to several exciting possibilities. The expanding internet environment benefits a variety of industries, including commercial and financial ones. The increase in internet users has sparked new business phenomena by inspiring the development of virtual world concepts. As a result, new currency alternatives, transaction platforms, and trading models have appeared.
- Cryptocurrencies have not yet been categorized as either assets or products. On the other hand, profits and revenues from the sale of cryptocurrencies are subject to income tax since, according to Indian law, the software is regarded as a “good” and can be taxed as such. Similar to other capital assets, selling bitcoin will trigger capital gains tax. The holding period, trading frequency, holding size, and accounting treatment are taken into consideration to make this determination.
- Due to the secrecy of virtual currency transactions, regulators typically struggle to keep track of them. Although being maintained on the blockchain, wallet IDs cannot be associated with specific people. Regulators are concerned about the idea of transferring anything valuable via the internet without using the traditional framework for financial surveillance because they cannot monitor the flow of money that may be used for money laundering.
- The Foreign Exchange Management Rules of 2015 and the Master Guidelines on Export of Goods and Services are likely to be applicable if Indian citizens transmit virtual currency outside of India in return for products or services offered by a non-resident firm.
- Investment advisers and fund managers in India are governed by the SEBI Investment Advisers Regulation 2013 and the SEBI Portfolio Managers Regulation 2019.
Even though managing and giving advice on cryptocurrency assets is not prohibited by the aforementioned legislation, SEBI has developed a list of the commodities that managers and advisors are permitted to trade. As a result, any investment advisers or fund managers offering virtual currency services in India do so in their capacity rather than as managers or advisers who have received SEBI authorization.
- Also introduced in Parliament is the 2018 Banning of Unregulated Deposit Schemes Bill. According to the article, it would outlaw any uncontrolled contributions that may be made in connection with initial coin offerings (ICOs).
