UAE-based cryptocurrency exchange Bitex on Tuesday said it has started providing investment declaration report for all its retail and institutional investors to become the first exchange in India to comply with the recent amendments made to the Companies Act 2013 by the Ministry of Corporate Affairs. In a notification issued late last month, the Ministry of Corporate Affairs had announced the amendments made in schedule III of the Companies Act with effect from April 1, 2021. According to the amendments, companies, which have traded or invested in cryptos during a financial year, must disclose, “first, profit or loss on transactions involving cryptocurrency or virtual currency; second, amount of currency held as at the reporting date, and third, deposits or advances from any person for the purpose of trading or investing in cryptocurrency,” the notification had said.
“The government has indicated already that a supportive environment will be created and interest of cryptocurrency investors will be safeguarded. Providing information through investor declaration reports makes the system more transparent and boosts the confidence of investors, government and regulators. It is very important for the ecosystem partners like exchanges to support the government when it is trying to bring in the right set of regulations,” Monark Modi, Founder and CEO, Bitex told The Outlooker Online.
Launched in 2018, Bitex entered the Indian market in November 2020 offering a mobile and web platform to invest and trade in digital assets with a matching engine that can handle up to 1 million transactions per second. The exchange provides charting tools, order books, and trade options, and a derivatives platform that offers quarterly futures trading contract and margin trading. Currently, Bitex offers six cryptos including Bitcoin, Ethereum, Ripple, Litecoin, Bitcoin Cash, XRP to its investors and is in the process to add more.
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The investment declaration report can be submitted for tax purposes by individual investors as well as by companies and can be used to prepare financial statements as stipulated by the government. “India has seen phenomenal growth in cryptocurrency trading volumes as well as the size of the community participating in this alternate investment class. Bitex aims to reach $20 million in daily trading volume by Q4 2021 and 2 lakh smartphone users in the Indian crypto market,” added Modi. Currently, the daily trading volume is around $2.5 million with 35,000 users in India on Bitex.
The government had last month also stated that the gains from cryptocurrency trading and services by crypto exchanges would be liable to be taxable. “Irrespective of the nature of business, the total income for taxation shall include all income from whatever source derived…the gains arising from the transfer of cryptocurrencies/assets is liable to tax under a head of income,” Minister of State for Finance Ministry Anurag Singh Thakur had said in a written reply to a question in the Rajya Sabha. Likewise, “supply of any service, if not specifically exempted, is taxable under GST and no service related to cryptocurrency exchange has been exempted.”
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