The Indian government has been looking for the views of tax experts on revelation and taxation recommendations for firms and family offices that are holding cryptocurrencies in their portfolios.
Well, talking in simple terms, companies are required to reveal their crypto holdings or any kind of dealings in cryptocurrencies in their filings with the Registrar of Companies (RoC). Sources have revealed that the government will clarify the tax connotations of such investments in the upcoming budget.
As per the revelations made by the tax experts, most of the companies that are holding cryptocurrencies on their books are showcasing them as business income. However, there is no denying the fact that it is really difficult to reckon the actual income and distinguish between different sources of income.
Yashesh Ashar, partner at Bhuta Shah & Co., a tax advisory firm revealed that there are firms and family offices that have recorded several transactions during the year, and reconciliation becomes a really hectic process. In addition to this, the settlement of losses from cryptocurrency transactions with other business incomes is also in dire need of clarity.
Sidharth Sogani, the Founder of a research firm, CREBACO recently released a statement that said that we all are aware of the fact that there are already regulations surrounding the holding of cryptocurrencies on the books of companies or family offices. Adding taxation and disclosure regulations will only contribute to the benefits for all.
In addition to this, Sudhir Kapadia, the National Leader-tax, EY India, suggested that income from the sale of investments in cryptocurrencies should be considered capital gains. Also, he mentioned that the income generated from dealing in crypto should be considered ordinary income.
It has been reported that the Indian government has intentions to amend current income tax and disclosure rules in the budget to involve cryptocurrency.