Companies Need to Disclose Transactions in Crypto Currency: INDIAN GOVERMENT
The Government has Introduced Stringent Disclosure Requirements to Improve Transparency.
The government has now asked companies to disclose transactions in their crypto currency to improve transparency. The Ministry of Corporate Affairs has amended various rules relating to audits, auditors and accounts in company law. The Ministry of Corporate Affairs implementing company law notified these changes on Wednesday.
These changes will be effective from 01.04.2021 Apart from the change in schedule three of the Companies Act-2013, the disclosure requirements have been enhanced. It also includes details of the company’s transactions in crypto currency.
Here is Some Important Details:-
(xi) Details of Crypto Currency or Virtual Currency : Where the Company has traded or invested in Crypto currency or Virtual Currency during the financial year, the following shall be disclosed :-
( A ) Profit or Loss on Transactions involving Cryptocurrency or Virtual Currency
( B ) amount of currency held as at the reporting date.
( C ) Deposits or Advances from any Person for the purpose of Trading or Investing in Crypto Currency / virtual Currency.
A senior official said that if companies trade in crypto currency, there should be transparency in the matter. It should be informed how much money is made from such business activities.
There are talks on banning cryptocurrency in India. In addition, its trading, mining, transfer and holding can be made a criminal offense.
The government is working on such a bill. The bill will give cryptocurrencies holders up to six months to liquidate it, followed by a penalty. The bill will not have much difficulty in legislating, as the government has an absolute majority in Parliament.
It is worth noting that the RBI had expressed concern about the impact of cryptocurrency in the past and had informed the government about it. The RBI had said that cryptocurrency could affect the financial stability of the country’s economy.