Personal Finance Financial News

Young Canadians are increasingly the targets of financial fraud, experts say, as the age group most comfortable with buying products online is likewise most exposed to risk.

digital assets traces its origins to 1998, marked by Nick Szabo's visionary concept of 'bit gold' – a decentralized digital asset. Cut to 2023, cryptos are the most well-known digital assets with more than 20,000 of them in circulation. How did the personal finance industry witness such a significant transformation over the years? Besides adapting to the evolving needs and preferences of investors, it saw rapid advancement of technology, the rise of fintech companies, and the increasing accessibility of information. This shift has empowered individuals with greater control over their financial decisions, offering a plethora of tools for budgeting, investing, and managing money. Moreover, the concept of financial literacy has gained prominence, urging people to take charge of their economic well-being. As a result, the personal finance industry has witnessed a revolution, placing a stronger emphasis on convenience, transparency, and user-centric solutions to cater to the demands of today's investors.Increasing crypto investments over the yearsBetween 2018 and 2020, the worldwide user base of crypto experienced a substantial growth of almost 190%, and this growth trend accelerated even further in 2021.

Those who went by the 2021 craze for cryptocurrencies and international investing suffered because they went by past returns.

Crypto investors in India expect a more friendly tax regime for digital assets and parity with other assets and regulations when finance minister Nirmala Sitharaman tables the budget for FY24 in less than two months.

The period between June 2020 and September 2021 was one of the best for the Indian equity market but 2022 is turning out to be a gut-wrenching time. The liquidity/volumes in the market have fallen by half and correction in small- and midcaps in India is severe.

Whether you’re an investor in a mutual fund or a cryptomaniac or an income-tax payer, there are a number of important money changes that will affect your money box in July. Read on to find out what they are.

From July 1, you will have to pay 1 percent TDS (tax deducted at source) on transfer of a virtual digital asset (VDA), as per a new income-tax section, 194S, introduced in the Finance Act, 2022. The TDS is required to be made at the time the buyer makes the payment to the seller. In its previous circular, dated 22 June, the Central Board of Direct Taxes (CBDT) made it clear that onus of withholding TDS will be on the buyer, exchange or broker. Read more about it here.

The year 2022 has not been a good one for crypto assets, as investors have seen sharp profit booking after a solid rise in 2021. Bitcoin, the cryptocurrency with the largest market capitalisation, closed at around Rs 17.55 lakh on 13 June, 2022 — its lowest level since December 2020 — on growing fears of the US slipping into a recession and in anticipation of rising interest rates.

Every investment has return expectations. While large negative deviations in the short-to-medium term are common in stock market investments, they often revert to the mean return expectations over the investment horizon. The uncertainty of returns and the deviations is referred to as risk.

Ever since the Advertising Standards Council of India (ASCI) came out with guidelines to advertise virtual digital currencies in April 2022, it has processed violations in as many as 29 advertisements. Manisha Kapoor, CEO and Secretary General, ASCI, says that these violations pertain to social media influencers not having disclosed that the posts were paid promotions by crypto companies as well as direct ads by crypto companies. Kapoor refused to divulge the names of the social media influencers who have been pulled up by ASCI because “the hearings and appeals process is still ongoing”, she adds.

In October 2021, when cryptocurrency prices were soaring, we saw several Indian celebrities being associated with cryptocurrency exchanges endorsing investments in cryptocurrencies and also launching their non-fungible tokens (NFTs) that enabled fans to buy and trade in NFTs. The crypto exchanges believed endorsements from trusted personalities build awareness and trust for investing in cryptocurrencies, which is why many exchanges associated with celebrities to endorse cryptocurrencies and investment features.

According to some media reports last week, capital market regulator Securities and Exchange Board of India (SEBI) proposed to the Parliamentary Standing Committee on Finance that celebrities should not be allowed to endorse cryptocurrencies.

The cryptocurrency market has endured a face-ripping freefall over the past fortnight. Fear and panic gripped the market as Bitcoin, the world’s first digital currency, tanked below $30,000 twice in a week, its lowest level in 16 months. Other blue-chip cryptos fell, with losses ranging from 30 percent to 90 percent.

There has been a spike in dealings related to virtual digital assets (VDAs) in recent times. Further, a market is emerging where payment for the transfer of a VDA can be made through another such asset. Hence, tax authorities have introduced a new scheme for the taxability of such transfers:

The lockdown in March 2020 paradoxically opened up the cryptocurrency market to a huge number of Indians.

As we step in to the new financial year, there are certain essential tasks that we must perform in the beginning, so that our financial matters remain stress free for the rest of the year. Here are four such unavoidable tasks:

India and the fintech industry are not alien to blockchain technology, which has become a huge talking point among startups, media and even in government corridors. And not without reason, blockchain is a platform that allows the recording of information in an extremely secure way, making it near-impossible to alter or break into the system. Blockchain has been described as a digital ledger of records called blocks, which are used to record transactions and track assets in a business network. It is known to democratise processes, ensuring security, transparency and efficiency, with one of the most attractive qualities of this technology being decentralised ownership.

The legal mandate on bringing digital assets under the ambit of taxation in this year’s budget speech was indeed a welcome and motivating move for the entire digital asset industry and Web 3.0 market.

On March 9, US President Joe Biden signed an executive order directing various government agencies to address the risks and harness the potential benefits of digital assets, including cryptocurrencies, and to also analyse the risks and benefits of establishing a central bank digital currency i.e. digital version of their dollar.

Cryptocurrencies will now finally be taxed in India. In her Budget speech on February 1, Finance Minister Nirmala Sitharaman said the transfer of digital assets - and these includes cryptocurrencies and non-fungible tokens- will attract a 30 percent tax. Additionally, all transfers of such assets will attract 1 percent tax deducted at source (TDS). Even gifting such assets will attract the 30 percent tax.

In Budget 2022, finance minister Nirmala Sitharaman gave clarity on how digital assets will be taxed. This means that gains from cryptocurrencies will now be taxed. At present, there are no explicit provisions dealing with taxation of cryptocurrencies under the income-tax act, 1961, given that the Cryptocurrency Bill is pending a debate in the Parliament.