Crypto Transactions Brought Under Money Laundering Act: All You Need To Know

India's new anti-money laundering provisions for crypto & virtual assets, including reporting suspicious activity to the FIU-IND

Money Laundering Provisions For Crypto Announced

The Indian government has recently announced anti-money laundering provisions on cryptocurrencies and virtual assets which are in line with the global trend of requiring digital-asset platforms to follow anti-money laundering standards.

Crypto Brought Under Prevention of Money-Laundering Act, 2002

The Prevention of Money-laundering Act, 2002 will be applied to crypto trading, safekeeping, and other crypto services. Indian crypto exchanges will have to report suspicious activity to the Financial Intelligence Unit India (FIU-IND).

Better Legal Supervision Of Crypto Assets

This move by the government will provide tighter oversight of digital assets and will require crypto platforms to adhere to the same regulations as other regulated entities like stocks and securities.

The Growth Of Crypto Trading

India had no clear policy on regulating or taxing digital currency and assets like NFTs until last year. However, the trading of these assets has increased manifold with the launch of cryptocurrency exchanges.

SOP For Crypto Assets

A few weeks ago FM Nirmala Sitharaman had stated that India was discussing with the G-20 member countries the need to develop a standard operating protocol for regulating crypto assets.

30% Crypto Tax Introduced Last Year

The Budget for 2022-23 had brought a 30% tax on income from transactions in virtual assets, and a 1% TDS (tax deducted at source) on transactions in virtual asset classes above a certain threshold. 

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Crypto And Digital Assets As Gifts To Be Taxed

Gifts in crypto and digital assets were also taxed similarly. The Indian government is working towards regulating and taxing digital assets to bring them under tighter oversight.

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