India brings Crypto currency under Money laundering law
The Government of India came forth with a notification bringing transactions involving crypto assets under the Prevention of Money Laundering Act.
The Union Finance Ministry has issued the notification about a step to cover virtual digital assets under the money laundering law with an aim at widening the taxation and regulatory net and giving teeth to agencies.
The necessity of this move:
The step is expected to attention investigative agencies in carrying out action against crypto firms.
The Enforcement Directorate and Income Tax Department would have been authorized either probed or are probing several cases against companies running crypto currency exchanges and transactions.
Prevention of Money Laundering Act:
Enacted: 17 January 2003
Commenced: 1 July 2005
The Prevention of Money Laundering Act, 2002 was introduced in parliament of India to prevent money laundering and to provide for confiscation of property derived from money laundering.
The Act and Rules have been notified for imposing obligation on banking companies, financial institutions and intermediaries to verify identity of clients, maintain records and furnish information in prescribed form to financial intelligence unit of India.
Legal status of crypto in India:
In the Union Budget last year, the central government introduced a tax for crypto currencies but it had not proceeded with framing regulations.
Earlier, the Reserve Bank of India had suggested a ban that was earmarked by a court order.
In July last year, flagging the RBI’s concerns, Finance Minister Nirmala Sitharaman informed Parliament that “international collaboration” would be required for any effective regulation or ban on crypto currency.
Taxation levied on Crypto currency:
India introduced a 30 per cent income tax on gains made from crypto currencies from April 2022.
In July 2022, rule of 1 per cent tax deducting at source on crypto currency came into effect by Government of India.
Question & Answer:
Q1. Under which act Finance ministry has covered crypto currency for more regulations recently?
Ans. Prevention of Money Laundering Act
Q2. When the Prevention of Money Laundering Act has been commenced?
Ans. 1 July 2005
Q3. How much percent income tax levied on gains made from crypto currencies?