Starting April 1, 2021, companies will have to disclose all their cryptocurrency holdings in their balance sheets. The move by the Ministry of Corporate Affairs (MCA) is being seen as an attempt to regulate cryptocurrencies, one of the hottest properties in the world of finance.
On March 25, the ministry amended the Schedule III of the Companies Act, 2013, which mandates all firms to provide details on their dealings in cryptocurrencies. The details include profit or loss on transactions involving virtual currencies, amount of currency held as at the reporting date and deposits or advances from any person for trading or investing in digital currencies.
Interestingly, some changes brought in by the government have already been put in place by market regulator Securities and Exchange Board of India (SEBI) for a class of listed entities. But now, it has been widened to almost all companies, including private firms.
Moreover, to cut frauds, MCA has asked companies to use only those accounting software platforms that provide the feature of recording transaction-wise audit trail and logging facility for each change made in the books of accounts.
Meanwhile, the government was expected to discuss a Crypto Bill in the Budget session of Parliament, but ended up not discussing it as the session ended today, instead of April 8, due to upcoming assembly polls in five states.
As per a BloombergQuint report, the proposed bill may ban all private cryptocurrencies and give a platform for India's official digital currency, which is to be issued by RBI. The ministry gave a clear picture that they want to provide existing investors a transition period to exit their holdings.
(Edited by : Jerome)
First Published: IST