As the government prepares to present the consultation papers on digital assets, the industry seems to finally find answers to a rather uncertain journey so far. Not to mention, the industry has been reeling, so far, under the impact of several taxation such as one percent TDS and 30% tax. “Ambiguity creates uncertainty for industry participants including investors, entrepreneurs, users, and policy makers which is not healthy for the digital assets industry,” Anshul Dhir, co-founder and COO, EasyFi Network, a decentralised lending platform, said.
Economic affairs secretary Ajay Seth said on Monday that the government’s consultation paper on cryptocurrency is finished and will be presented soon. According to Seth, the consultation paper is almost ready. In addition to consulting with cryptocurrency players, the government had also held dialogues with the World Bank (WB) and International Monetary Fund (IMF).
According to Vishakha Singh, vice president and co-founder, WazirX, a cryptocurrency exchange, there have been conversations around cryptocurrencies and NFTs which reflected India’s outlook towards the space. “These are early days to comment on the proposition of guidelines or its impact on digital assets in India. We will wait to hear for the guidelines to be passed to understand its definitive impact on this segment,” she said.
Furthermore, with the first date for advance tax payment due on June 15, it is believed that Central Board of Direct Taxes (CBDT) will look to provide pointers regarding the definition of VDAs, and whether they should be classified as an asset or currency depending on factors such as volatility, market stability, among others. However, industry players point out that non-fungible tokens should be kept out of the ambit of digital currency, “When someone buys a NFT, she does not buy a physical object. If the original digital work was freely available to view on the Internet, it will usually remain freely available. On top of this, NFTs enjoy regulatory freedom in markets such as Singapore and UK. India should take a leaf out of their book,” Ankit Wadhwa, co-founder and CEO, Rario, a NFT platform, told FE Digital Currency.
Industry experts opine that as digital assets can be used to reap long term benefits on investments, regulation should promote the use of this new technology, as opposed to acting as a deterrent. “Taxation should be implemented at a point which will then encourage the larger audience to embrace the manifestations of this technology while at the same time, deter people from looking at it with malicious intentions. We are, at this stage, required to balance adoption and misuse, and taxation with clarity and transparency could surely be the solution to this challenge,” Ramkumar Subramaniam, co-founder and CEO, GuardianLink, a decentralised platform, said.
from | The Financial Express https://ift.tt/jQWNwVF
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