Budget 2022 Expectations: The Union Budget 2022 is just days away with the government announcing that finance minister Nirmala Sitharaman will present this year’s Budget at the Parliament on February `1. The Budget session will kick off on January 31 and will be held in two parts. Before the Budget session begins, business sectors across India place their demands and have expectations from the government regarding the new rules. This year, the cryptocurrency industry, which has recently come under the scrutiny of the Centre and the Reserve Bank of India, has put forth its speculations and expectations from the government amid the talk of the introduction of a cryptocurrency regulation Bill in the Parliament.
Experts have been demanding to consider cryptocurrencies as an asset class and have been expecting a new rule for the same during the Union Budget 2022.
“The industry is waiting for an official communication on the proposed Crypto bill. We believe that regulatory clarity will bring clarity and encourage more Indians to start their Crypto investing journey. We are hopeful that the regulatory framework for crypto-asset investing would focus on four main areas,” said Ashish Singhal, Co-Chair of Blockchain and Crypto Assets Council and Founder and CEO of CoinSwitch Kuber.
Singhal listed the four main areas of concern as Crypto classification, regulatory framework, standard KYC and regulator. He said, “Crypto should be classified as an asset. It is similarly regulated in many other countries, and almost all use cases of crypto are an investment and not payment.” He further pitched for a proper framework for the movement of funds and insisted on bringing in KYC procedures. A proper reporting structure must be put in place, Singhal said.
“In the upcoming budget, we expect the government to consider levying TDS/TCS on the sale and purchase of cryptocurrencies. This can be a turning point for the crypto industry. We anticipate the government will be considering amending income tax laws to tax cryptocurrencies – expected to be imposed above a certain threshold, and such transactions can be brought into the ambit of specified transactions for purposes of income tax reporting,” said Vikas Ahuja, member of BACC and CEO at CrossTower India.
“Moreover, we are also expecting the Bill to seek and promote the ‘official digital currency’ that will be issued by the Central Government and the RBI and will likely be referred to as ‘cryptoassets’ rather than ‘cryptocurrencies’ – considering it as emerging assets,” he added.
According to Om Malviya, president of Tezos India, the industry is facing a lot of volatility at the moment. “At a time when the nascent yet rapidly-growing crypto industry in India is tiding through a lot of uncertainty and volatility, the upcoming Union Budget should focus majorly on regulating the sector by classifying cryptocurrencies as an asset class for India and providing regulatory clarity in terms of tax applications for them,” he said in a note to News18.com.
“Furthermore, the roll-out of a comprehensive self-regulatory body or group for and of the cryptocurrency and blockchain sector players can also be considered by the Government – which in turn is bound to give a boost to the realization of its vision of ‘Digital India’ without crypto being seen as a threat to existing financial and banking structure of our country, he added.
The government was set to introduce a new Bill regulating cryptocurrencies at the Winter session of the parliament, but that did not go on as planned. “The Finance Minister, Nirmala Sitharaman, had previously stated that the cryptocurrency sector cannot be ignored anymore. The Supreme Court of India had overruled the previously imposed ban by the banks on cryptocurrencies. It suggests that the sector might be headed towards a progressive boost during this budget,” said Edul Patel, CEO and co founder of Mudrex.
“The Government had stated that they might be classifying cryptocurrencies based on use cases. It would also help with the taxation aspect. The sector would do better with progressive regulations from the government,” he added.
However, Kumar Gaurav, CEO of Cashaa said that there was no way the government can ban cryptocurrencies. “They can certainly ban the legitimate use of crypto which will only make it difficult for a common person who does not understand what they get involved in. However, what we understand is that the Indian government is trying to crack down on scams that are running in the name of Bitcoin,” he said.