Indian companies will now have to disclose their crypto holdings in financial statements
March 25, 2021, 7:25AM EDT
1 min read
Indian companies have been mandated to disclose their crypto holdings in financial statements, according to new rules that are coming into force on April 1.
India's Ministry of Corporate Affairs amended Schedule III of Companies Act, 2013 on Thursday, and it now requires companies to detail their crypto holdings.
The details include "profit or loss on transactions involving crypto currency or virtual currency," "amount of currency held as at the reporting date," and "deposits or advances from any person for the purpose of trading or investing in crypto currency/ virtual currency."
The rules apply for all Indian firms, including private and publicly-listed companies, Amit Maheshwari, partner at accounting firm AKM Global, told The Block. He added that companies will have to report crypto holdings in both their profit and loss statements and balance sheets.
"I think the message is clear. The government is going to examine crypto transactions of companies," said Maheshwari.
Last month, there were reports that India's top securities regulator wants promoters of companies looking to go public to sell their cryptocurrency holdings before raising money.
The new rules come as India is said to be banning the use of cryptocurrency. The country's government was expected to discuss a crypto bill in the Budget session of Parliament but ended up not discussing it as the session ended today. The session was to conclude on April 8 initially, but the plan changed due to Assembly elections in some states.
The crypto situation in India remains confusing, as The Block reported earlier this month. Crypto exchange executives are preparing for the worst-case scenario — a full ban that would force them to relocate. But they are also optimistic that this won't happen.