Indian Government Now Requires Companies to Disclose Cryptocurrency Holdings
The Indian government has introduced new cryptocurrency disclosure rules. Companies dealing in cryptocurrencies will have to disclose their crypto holdings, among other disclosures, as part of their financial statements beginning April 1.
New Crypto Disclosure Requirements
The Indian Ministry of Corporate Affairs (MCA) issued a notification last week mandating companies to disclose crypto trading and investments during the financial year. These disclosures will be required starting on April 1, which is when India’s financial year 2021-22 begins.
Every company which “has traded or invested in cryptocurrency or virtual currency during the financial year” must disclose “profit or loss on transactions involving cryptocurrency or virtual currency,” “amount of currency held as at the reporting date,” and “deposits or advances from any person for the purpose of trading or investing in cryptocurrency or virtual currency.”
Crypto companies in India welcome the new requirements by the government, believing that it legitimizes cryptocurrency transactions. Monark Modi, founder and CEO of Indian cryptocurrency exchange Bitex, was quoted by local media as saying:
In light of the recent speculation around ban, allowing cryptocurrencies to be a part of accounting practices will definitely put investors at ease as they no longer have to be worried regarding taxation.
He added: “This is a definite endorsement, and it is good to see that India is not falling behind the global cryptocurrency race. Bringing regulation that provides safety to investors, factors taxation and fosters cryptocurrency as an alternate investment class will be the right step ahead.”
The Indian government is currently finalizing a cryptocurrency bill that was supposed to be introduced during the Budget session of parliament. However, the session has ended and no crypto bill was introduced.
The finance minister has given some clues about what might be in the crypto bill. She said that the government will not shut off all options and will take a calibrated position regarding crypto legislation. Meanwhile, the central bank, the Reserve Bank of India (RBI), says that it has voiced some major concerns regarding cryptocurrencies to the government. Nonetheless, RBI Governor Shaktikanta Das believes that the government and the central bank are in agreement on cryptocurrency.
Do you think the new crypto disclosure rules are good for the industry? Let us know in the comments section below.