Provisions relating to taxation were the first crypto specific laws introduced in India. Finance Act, 2022 has introduced a new provision in form of Section 2(47A) defining ‘virtual digital assets’ (VDA) in a broad and inclusive manner. A new tax has been levied through Section 115BBH of the Income tax which requires any income from transfer of any VDA to be offered to tax at 30%.
From a regulatory perspective, designing the corporate structure of a blockchain-based startup is arguably the most important preliminary step. The number of entities required and their functional interaction must be delineated carefully, depending on the nature of their business offerings, technical operations, customer interactions and tax implications.
India has witnessed meteoric growth in the field of FinTech innovation. Banking and financial institutions have wholeheartedly embraced technology and contributed to the broader mission of ‘digital India’. Technological innovation has transformed the entire payment system landscape in the last decade and various FinTech solutions including digital wallets, lending platforms, EMI solutions, neo-banking and scan & pay have ensured mass adoption of digital payments in the country.
Many cryptocurrency projects involve issuing a native cryptocurrency or token which allows them to raise funds for further growth, development and maintenance of the network/ecosystem. The shape and form of such launches have undergone significant changes compared to the early trends of 2016 – 17.
Many cryptocurrency projects involve issuing a native cryptocurrency or token which allows them to raise funds for further growth, development and maintenance of the network/ecosystem. The shape and form of such launches have undergone significant changes compared to the early trends of 2016 – 17.
Well-designed contracts must strike a delicate balance between long-term goals and day-to-day conveniences. They must not only foresee, and guard against, extant legal risks, but also have a keen eye on emerging regulatory developments in the space.
Both markets and governments are recognizing the efficiencies and ethical promise of blockchain technologies. They have witnessed a remarkable adoption curve over the last few years, and given rise to many policy challenges including privacy, free speech, self-governance, data security to name a few.
At Crypto Legal, we pay close attention to this developing landscape and provide evidence-based opinions on complex policy questions. In this endeavour, we work closely with academic partners, think tanks and advocacy groups to articulate meaningful convergences.
Companies working in the blockchain and cryptocurrency space presently operate in a dynamic and uncertain regulatory landscape. This is true not just for India, but for most jurisdictions in the world. Consequently, startups require periodic and up-to-date legal advice.
Compliance obligations under different statutes can differ in nature and may broadly be categorized into compliances related to registration or licence, maintenance of record/register, filing or forms/returns, deposit of recurring fees, display requirements, technical security standards or procedural compliances.