However, to guarantee the monitoring of an anti-whiteness perspective and on the financing of terrorism (AML / CFT), the financial intelligence unit (FIU-Ind) records the virtual active service providers (Vasp) under the law on money laundering prevention (PMLA), he said in a written response in LOK SABHA.
“Currently, cryptographic / virtual assets are not regulated in India. Therefore, the question of the legality or illegality of specific cryptographic platforms does not arise on the date,” he said.
The registration requirement also applies to national and offshore platforms which are aimed at users based in India, he said.
The FIU-Ind therefore maintains a dynamic list of virtual asset service providers that are not registered with them, he said.
Separately, he said, finance ACT, 2022, introduced article 194 of the 1961 income tax law, requiring a 1% tax deducted at source (TDS) on the transfer of virtual digital assets (VDAS).
This applies to all transactions, including those involving offshore entities, if income is impatient in India, he said.
In addition, the Reserve Bank of India (RBI) has issued opinions warning users, holders and merchants for virtual currency or cryptographic assets concerning potential risks, including economic, financial, operational, legal and security problems, he said.
These opinions were on the sector and did not comment on individual platforms, he said.
Answering another question, CHAPHARY said that income tax in the transfer of virtual digital assets (VDA), under article 115BBH of the 1961 income tax, was introduced from 2022-23.
The amount of VDA income tax in accordance with income statements was Rs 269.09 crore in 2022-2010 against Rs 437.43 crore in 2023-24, he said.
The government uses data analysis tools to trace and detect tax evasion of transactions related to VDA, he said.
The analysis includes the use of the non-filage monitoring system (NMS), the Insight project and the internal databases of the income tax service, to correlate the information available on VDA transactions with transactions disclosed in the return of income by the taxpayer, he added.
Several capacity building initiatives are undertaken by the government to equip agents for effective compliance surveillance and a survey on VDA-related transactions, he said.
Training programs, specialized workshops, Chintan Shivirs and practical workshops are regularly organized by various income tax training institutes, he said.
At the local level, he said, offices in the field perform training sessions and webinaries on digital criminalics, blockchain analysis, legal frameworks and manipulation of digital evidence.
Officers and civil servants are also given to short-term training on digital criminalics, in partnership with the National Forensic Science University (NFSU), Goa, which allows them to identify and trace transactions related to VDA from data captured during intrusive actions, he added.
