Centre likely to classify Cryptocurrency as Commodity; how will it affect you?
Experts hail the move of the government as it will bring more investment and clarity on taxation
The Centre is planning to lay the framework for regulating the investment in cryptocurrencies in India. The government is in the process of introducing a draft bill which will define the classification of cryptocurrencies for taxation.
The Central government has plans of compartmentalising cryptocurrency under assets/commodities for purposes like taxation and as per use cases like utility, investment or payments, the Economic Times reported.
For the first time cryptocurrencies will be classified as per the end use of the asset class for the purpose of regulation. This move by the Centre could be a possible morale booster for people who invest in cryptocurrencies as it will lead to higher awareness, education, acceptance of cryptocurrencies and boost the investment, ET reported quoting industry observers.
Crypto Exchanges and industry experts so far have welcomed the Centre’s intentions regarding cryptocurrencies and are waiting for the bill to provide more clarity.
How Experts see the government’s move
According to Wazir X Founder and CEO, Nischal Shetty, categorising cryptocurrencies is crucial for having the right kind of regulations in the country and globally it is categorised into four major classes— security, asset, utility and currency, the ET reported.
Shetty also added that it is a very positive step for the entire industry and it would bring more clarity and see more entrepreneurs entering this sector, the report mentioned.
Mudrex Co-founder and CEO, Edul Patel hailed Centre’s draft bill on cryptocurrencies as ‘giant leap in the right direction’ and also said it could be a game-changer for the cryptocurrencies in the country.
Hitesh Malviya, founder of itsblockchain.com, called it a great move by the Centre to acknowledge that cryptocurrencies serve different business use cases of blockchain and the steps taken towards the categorisation of cryptocurrencies is mature and very thoughtful, the ET quoted. Avinash Shekhar, Co-CEO, ZebPay is of the opinion that a clear regulatory framework around cryptocurrencies would aid entrepreneurs, businesses and investors to participate in the market with more confidence.