Crypto transaction details must

Finance minister Nirmala Sitharaman proposed amendments in provisions of Block assessment for search and requisition cases.
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Representational image.
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BENGALURU: Virtual digital assets (VDAs) such as crypto will be included in defining undisclosed income. This means transaction details should be furnished mandatorily.

Finance minister Nirmala Sitharaman proposed amendments in provisions of Block assessment for search and requisition cases.

“It is proposed to add the term virtual digital asset to the said definition of undisclosed income of the block period. The time-limit for completion of block assessment is proposed to be made as twelve months from end of the quarter in which the last of the authorisations for search or requisition has been executed,” she said. This move ensures greater oversight as any entity that deals with crypto assets needs to furnish details of transactions. Sumit Gupta, co-founder, CoinDCX said there are some provisions aimed at achieving individual tax compliance for VDA investors, which will likely lead to more compliance burdens on domestic exchanges that are already adhering to the regulations.

Sitharaman also proposed to provide transfer pricing provisions for arm’s length price determination in relation to similar transactions to be applicable for a period of 3 years. This transfer pricing rationalisation to benefit Global Capability Centres (GCCs) and MNC service providers.

On transfer pricing, Rajesh Nambiar, president, Nasscom said the block assessment for transfer pricing is a major step toward easing compliance for tech multinational enterprises and commitment to expanding Safe Harbour Rules are welcome steps forward. The amendments proposed for improving the tax certainty for MNCs by bringing in block transfer pricing assessments for three years in one go and expansion of safe harbour provisions is likely to improve the foreign investors sentiment.

Here a taxpayer has an option to apply the outcome of a transfer pricing assessment for a financial year to successive two financial years. This amendment aims to reduce transfer pricing disputes. Transfer pricing is between two entities where one firm charges another one for services provided.

The government also proposed to provide a presumptive taxation regime for non-residents who are engaged in the business of establishing or operating electronics manufacturing facilities, as this will help further promotion of domestic manufacturing.

Also, compliance burden for small charitable trusts & institutions to be reduced, by increasing their registration period from 5 years to 10 years. Another significant announcement that was made in the Budget is that taxpayers can claim annual value of two self-occupied properties as nil without any condition.

Currently, taxpayers can claim the annual value of self-occupied properties as nil only on the fulfilment of certain conditions.

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