The government is aiming to define cryptos in the latest draft bill that also suggests to categories cryptos on the basis of their use cases.
According to reports, cryptos will be regarded as a commodity/asset for all reasons, including taxation and according to use case – investment, payments or utility.
This would be the first time cryptos will be compartmentalize according to the technology they use, but the government’s center of attention will be based on the end-use of the asset for regulatory purposes.
The bill is also supposed to define the tax treatment for such assets, so that it is clearly categorized in the account books. Also, it should be taxed in the correct way. It is not thinking to enable settlements and payments through digital currencies.
Whether for other purposes or tax, there is no transparency as to whether crypto assets are commodities, currencies, services or near to equity.
This is an unfilled space in the regulation, as unless as asset is outlined, vagueness of how it should be regulated or how it should be taxed becomes a query.
Recently, crypto exchanges have made policy recommendations for taxing cryptos, including defining cryptos as digital assets and launching a system to register homegrown exchanges.
They had proposed that the country requires to acknowledge crypto tokens as digital assets instead of currencies and explain policies regarding exchange ownership parameters, reporting and accounting standards, KYC, among others.