Indian officials are currently discussing the possibility of providing an exit window that would allow crypto holders to sell their assets ahead of a possible ban on all private digital currencies, The Indian Express reported today.
The government should provide an exit window for existing cryptocurrency holders in the event of a total ban, a government official was quoted as saying.
According to the statement, the possibility of such a grace period, which could last three to six months, was discussed at an inter-ministerial meeting today.
The Indian government has reportedly proposed a new law that could impose a blanket ban on private cryptocurrencies like Bitcoin and Ethereum, but not the Reserve Bank of India’s own digital currency, which is currently under development. The proposal makes it illegal to own, issue, extract, trade or transfer digital assets.
However, it is not yet known how strict the new legislation will be, as the bill, called the Cryptocurrency and Regulation of Official Digital Currency Bill 2021, has not yet been finalized. Moreover, Indian Finance Minister Nirmala Sitharaman has previously stated that there is still a small window of opportunity for bitcoin as the government continues to experiment with crypto.
We have discussed this issue at length. There is an expert panel report, followed by inter-departmental discussions, cabinet ministerial meetings and contributions to the government from various stakeholders on the issue. This bill would certainly address all of that. The government will introduce the bill, a senior government official told The Indian Express.
Taxes still applicable
At the same time, despite the lack of clear laws on digital assets, Indian cryptocurrency holders still have to pay taxes on trading profits, state finance minister Anurag Singh Thakur said in late March.
Regardless of the type of business, total income for tax purposes must include all income from all sources that… Income from the transfer of cryptocurrencies/assets is subject to income tax, Thakur said, adding: Every service, unless specifically exempted, is taxable under the GST and no service related to the exchange of cryptocurrencies is exempt from tax.
Moreover, according to today’s report, the Indian government may even require crypto enthusiasts to file retrospective statements of asset ownership and transactions – even after the exit window closes.
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