Crypto Currency to be reported in Schedule-III – Companies Act
Reserve Bank of India (RBI) has taken quite a cautious approach towards crypto currency trading in India. The Government has shown signs of banning crypto trades in India on many instances and has also shown interest in launching an official crypto currency as well. A recent amendment has been made by the MCA asking the companies to disclose their holdings in crypto currency and profits and gains from crypto currency trades. Such a muted amendment made by MCA raises a question whether is it a step forward to regularising crypto trading in India or is it a measure for mitigating tax evasion & money laundering activities by those using crypto trade as an instrument for these activities.
MCA amends disclosure norms of Schedule III of Companies Act in financial statements
In order to bring in greater transparency in reporting of financial statements, the Ministry of Corporate Affairs (MCA) vide notification dated 24.03.2021 has amended the Schedule III to the Companies Act effective from 1st April, 2021 to mandate various disclosures by companies in their financial statements. This was stated by Union Minister of State for Corporate Affairs Shri Rao Inderjit Singh in a written reply to a question in Rajya Sabha Today. The Minister stated that the new disclosures with respect to the virtual currency/ crypto currency transactions and CSR spending undertaken by companies during a financial year are as below:
Reporting 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:
|
Reporting for Corporate Social Responsibility (CSR) |
|
Where the company covered under section 135 of the Companies Act, the following shall be disclosed with regard to CSR activities:
|
About Author:
The article is posted by CS Vikash Verma who is an Associate Member of Institute of Companies Secretaries of India having good experience in legal and secretarial matters. He specialises in providing services in Startup, RERA, Charity Commissioner- Trust matters, FDI-RBI, ROC-MCA, NCLT and other services related thereto. He is proprietor in Company Secretaries Firm M/s V Vikash & Co. He can be reached by mobile at: 9785593575 or by email at: csvikashverma2@gmail.com.
Disclaimer: Taxwink is not responsible for any views of the author. Therefore, the readers are requested to check authenticity of the facts contained therein before applying the same. Further, the above information is subject to change in view of any amendment by the Government in future.
