Indian companies from now on might be required to disclose their crypto holdings in their Standard SCH III balance Sheet. Reporting with the Ministry of Corporate Affairs comes under the company’s act 2013. This regulation would impact almost every company that has registered through the company’s Act.
India’s blockchain lawyer Varun recently shared a draft image and stated that as per the Standard Scheduled III Balance Sheet, companies reporting with the Ministry of Corporate Affairs will have to disclose their cryptocurrency holdings if any. “This means every corporate in India now has to report its crypto holding. And guess what, it will be public data!” he said. He also added that “These are positive baby steps towards recognition as a separate asset class.”
Looking at the Ministry of Corporate Affairs recent notifications and amendments to the Schedule III of the Company’s Act suggest that the Indian government might be planning to impose a capital gain tax on crypto holders especially corporate companies.
The amendment comes at a time when there is a lot of FUD in the Indian market about a possible blanket ban. The Finance Minister of the country also assured before that the government might not go with a complete ban and would offer a window to check how digital assets could impact the economy and also said that there have been several discussions between the government and the central bank over the past few weeks.
RBI Governor Shaktikant Das said that The Reserve Bank has flagged “major concerns” on the cryptocurrencies traded in the market. Das also said that there is no difference between the central bank and the Finance Ministry on the matter of crypto. Both of them are committed to the “financial stability” of the Indian market. “The RBI is working on its way for the central bank digital currency (CBDC) aka digital Rupee,” said Shaktikant Das in the India Economic Conclave.
Though the government cannot completely ban a decentralized asset like Bitcoin. Many governments who have tried doing so have failed miserably. People often shift to peer-to-peer exchanges in case of a ban on centralized exchanges. Many others also use international crypto exchanges which do not require KYC services. The Indian Central Bank RBI had imposed a banking ban back in 2018. However, that didn’t put a halt to crypto trading in the country.
Countries like South Korea have decided to impose a capital gain tax on crypto trading. India could potentially go the same way as it would create a new revenue stream. The government can regulate the crypto space to help the growing crypto community.