India may treat cryptos as a financial asset

India may treat cryptos as a financial asset

Question: I read in the press that the Indian government is bringing in legislation to rein in crypto currencies. Is this a good policy having regard to the fact that e-currencies are becoming popular throughout the world? Answer: A bill is likely to be introduced in the Winter Session of Parliament starting from the end of this month. The object is to treat crypto currencies as a financial asset but at the same time safeguarding the interest of retail and small investors. The legislation may stipulate a minimum amount for investments in digital currencies. However, these currencies will not be usable as legal tender. It is also possible that the legislation may prohibit all private crypto currencies but provide exceptions with a view to promote the technology of crypto currency and its uses. The Reserve Bank of India is in favour of putting effective curbs on digital currencies as it may affect the nation’s macroeconomic and financial stability. In the budget to be introduced on 1st February, 2022, capital gains made from transfer of crypto currencies are likely to be brought to tax. Question: My son has set up a successful enterprise in India, being one of the early startups.