Govt plans to bring a bill, Cryptos to be treated as commodity
Published On: Friday, September 3, 2021 | By: Team KnowMyStock
The government is planning to define cryptocurrencies in the new draft bill that also proposes to compartmentalise virtual currencies on the basis of their use cases, according to some sources. Cryptocurrencies will be treated as an asset/commodity for all purposes, including taxation and as per user case — payments, investment, or utility. People in the know said only the cryptocurrencies that are covered under the government’s definition will be allowed to be traded in India. These crypto assets will then be taxed accordingly, said people aware of the development.
“The government in its draft bill is working towards defining cryptocurrency and its treatment in various use cases, so that it can be treated correctly in the books of accounts plus it should be taxed in the right manner,” according to the source. “It is not looking to allow payments and settlements through virtual currencies.”
This is a lacuna in the law, as unless an asset is defined, ambiguity of how it should be taxed or how it should be regulated becomes a question.
According to the people close to the development, the government is looking to first define cryptocurrency.
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