Amendments have been made in the 3rd Schedule of the Indian Companies Act, 2013 by the Indian Government for bringing in crypto. Indian entities, organizations, corporations and companies will be required to submit details of crypto transactions to the Securities & Exchange Board of India (SEBI).
In India, the Government has amended the Companies Act, 2013 for incorporating crypto assets. Indian Corporate Affairs Ministry informed that the initiative has been taken for the regulation of digital assets. The Minister concerned stated that if India has to host crypto then regulating corporate affairs, in the context of crypto, is essential. The Minister added further that by doing so, they will provide transparency to the corporate sector and ensure compliance of filing requirements.
As an interim measure, the Ministry has requested all Indian corporations to immediately disclose crypto dealings within their respective balance sheets. It was further informed by the Ministry through a press release that 3rd Schedule of the Act has been amended accordingly. As per the amendment all the companies will be obligated to share details regarding crypto with SEBI.
It has been made mandatory that any transaction relating to crypto will be intimated. In addition, the companies will need to give profit and lost details gained/occurred through crypto trading. For instance, the details such as advances, deposits or the held amount paid to or received from any person will need to be properly documented and filed.
It was further clarified by the Ministry that the relevant law dealing with the issue has been accordingly amended. However, it will not come into force retrospectively. Instead it will be implemented at the end of fiscal year 2021. This simply means that from July 1, 2021, the law will be implemented in letter and spirit.
Pallav Naran, who is a qualified Chartered Accountant working with CNK RK & Co. as partner commented on the amended law. He suggested that the aim of the Government is to incorporate digital assets as well as to regulate them properly. He stated that for the time being the Government is unaware as to which corporate entity is involved in crypto trading. In addition, what digital assets in how much quantity are available with an entity, is not known to the Government. He suggested that because of this lack of knowledge, the Government has intended to amend the law.