Government of India has ordered companies to disclose details of investments and trades in cryptocurrency in financial statements. This is part of the government’s efforts to assess the scale of such transactions and keep tab on entities.
A notification issued by the ministry of corporate affairs (MCA) to Schedule III of the 2013 Companies Act., asked companies to provide details of cryptocurrency or virtual currency, such as profit or loss on transactions, amount of currency held on the reporting date and deposits or advances from any person for the purpose of trading or investing in cryptocurrency. A provision for this had already been made in Companies (Auditor’s Report) Order 2020, following reports that several firms were getting investors to park fund in cryptocurrency.
The amendments to the Companies Act of 2013 will come into effect at the start of April.
According to the notification document published on Wednesday, Indian firms both public and private that have invested or traded in cryptocurrencies during the financial year must disclose their profits or losses.
A source, as per Times of India report, said the government was unable to get a fix on the scale of cryptocurrency transactions and the companies were not disclosing it. The report, citing its source, said it will also help in investor protection.
Mr. Sumit Gupta, Co-founder & CEO, CoinDCX, said in a statement, "It is a welcome move as the amendment is a great stride towards a regulated environment which is what the industry has been eagerly anticipating. Besides ushering in transparency for the system it will enhance the confidence of investors both retail and institutional especially in the wake of ongoing speculations around the cryptocurrency bill. We are a home grown entity and we have diligently adhered to the KYC norms and other regulatory practices. We have always reiterated the need for regulation, taxation and transparency for our sector."
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