Indian Economic Affairs Secretary Ajay Seth provided an update this week on the government’s progress to establish India’s crypto policy. The minister said formulating a law will take time. Speaking about the government’s consultation paper on crypto, he was quoted by CNBC TV18 as saying:
“One, our consultation paper is fairly ready and we went into a deep dive and have consulted not just the domestic institutional stakeholders but also the World Bank, and the International Monetary Fund. So we hope that we will soon be in a position to finalise our consultation paper.”
“So we hope that we will soon be in a position to finalize our consultation paper,” the economic affairs secretary added.
When asked to say what future steps are likely, Ajay Seth said it is not possible for him to say anything in this regard. He said, "Whatever the current challenges are, they are being responded to in a timely manner." He also said that a global response is needed to deal with the challenges posed by crypto.
The senior bureaucrat stressed: “This point has been made time and again. Even other countries are talking about the same thing. The IMF is also talking about the same thing, as is the U.S. treasury.” He noted:
"We are looking at a ‘global paradigm’ on digital assets."
In the Union Budget for FY2022-23, Finance Minister Nirmala Sitharaman had imposed a 30 per cent income tax on earnings from virtual digital asset transactions without any deduction for losses. As per the guidelines, such income will be taxable even if taxpayers’ total income is below the threshold limit of Rs 2.50 lakh. This proposal came into effect on April 1, 2022. The budget had also proposed a 1 per cent Tax Deducted at Source (TDS) on payments towards virtual currencies beyond Rs 10,000 in a year and taxation of such gifts in the hands of the recipient. The TDS provisions will come into effect in July.
The government is also working on guidelines making it mandatory for aggregators to redress consumer complaints in a stipulated timeframe. Last month, the Securities and Exchange Board of India (SEBI) suggested that no ‘prominent public figures, including celebrities, and sportsmen’ should endorse crypto products and the advertisement disclosure should also talk about possible violations of laws.