Govt taps experts on taxing crypto assets held by firms, family offices : Rashtra News
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Companies currently have to disclose any holdings or dealings in cryptocurrencies or crypto assets in their filings with the Registrar of Companies (RoC). One of the people said the government could clarify the tax implications of such investments in the upcoming Budget.
Most companies that hold cryptocurrency on their books are offering them as income (mainly, business income), but because there is no clarity on taxation, it is really difficult to compute actual income and how to treat them, tax experts said.
“There are companies and family offices that have several transactions during the year, and reconciliation becomes a really difficult process. Further, the set-off of losses from cryptocurrency transactions with other business income also requires clarity,” said Yashesh Ashar, partner at tax advisory firm Bhuta Shah & Co.
Losses from the investment or trading are unlikely to be allowed to set off against regular profits as these are “speculative transactions”.
“There are already regulations around holding cryptocurrency on companies’ or family offices’ books, and it only makes sense to have a regulation around disclosure and taxation. Many early investors have made substantial gains in cryptocurrencies and they may also benefit if the government comes up with a framework on whether this will be long-term or short-term capital gains,” said Siddharth Sogani, founder of CREBACO, a cryptocurrency research firm.
Tax experts pointed out that companies are reporting and applying tax on their returns from cryptocurrencies differently due to regulatory confusion.
“There could be three types of companies that would have exposure to cryptocurrencies, first those that are into the business of crypto assets, second those who may have only invested in cryptocurrencies, and third, those companies that accept payment in cryptocurrencies said Sudhir Kapadia, national leader-tax, EY India.
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( News Source :Except for the headline, this story has not been edited by Rashtra News staff and is published from a economictimes.indiatimes.com feed.)
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