“Crypto Law Is Due In February 2022”, Says Government of India

Indian Government is in the middle of introducing a crypto law which it plans to implement in the month of February next year at the time when the general budget too is going to be announced. One thing is for sure though that there wouldn’t be any banning of digital assets and that such assets will be regulated in India as “commodities”.

India has been in the middle of getting its first-ever crypto law approved by the Indian Cabinet. However, it has been reported that the approval has been postponed for the time being. It has been told that the Indian crypto law would be implemented in full force in the month of February 2022. The date has been chosen because at that time the Indian Government will be announcing general budget for the year 2022 as well. So the Indian Government wishes to introduce first the budget and then the crypto law.

The intention of the Government was duly disclosed by the Indian Finance Minister. She told the press that the Indian crypto regulation is due in February next year. She also confirmed the fact that the law will be introduced simultaneously with the announcement of general budget. The budget session for the 2022-23 is due to take place on 1st of February, 2022 in India.

However, a few provisions that have been contained in the law were revealed by several Government officials, including the country’s Finance Minister. Most important thing about the future law is that Indian Government has categorically stated that there will be no digital assets trading. This is the clarity which the Indian public was expecting from their Government. Otherwise, they were under an impression that the Government will impose a permanent ban on digital assets.

The second most important thing about the crypto law is that “digital assets” have been specifically defined in the law. Digital assets have been defined to mean “commodities” and therefore they will be treated as such. This would mean that a legal status will be provided to the crypto industry and digital assets. However, since commodities are subject to regulation under the Indian law, therefore, digital assets too will be regulated.

The intention of regulating crypto in India is also obvious from the fact that the Government has proposed to tax digital assets. A taxpayer would be required to disclose his or her crypto holding to the respective Indian authority. If the assets are lying in an offshore exchange even then Indian tax authorities would be liable to collect tax under Capital Gain Tax heading.

For the time being, Indian Finance Ministry is refining the proposed crypto law with the cooperation of Reserve Bank of India. Meanwhile, the Reserve Bank of India has commented that it has a lot of concerns regarding the proposed law. The Government has ensured the bank that it will address the concerns in due course.