Mentor’s comment-
- https://www.thehindu.com/
opinion/op-ed/taxing- cryptocurrency-transactions/ article38279469.ece - In the intro, mention that the Income Tax Act, 1961 (“IT Act”) does not specifically mention cryptocurrencies, it does cast a wide enough net to bring crypto transactions under its ambit. .
- In the body, mention challenges such as scope for varied interpretation and uncertainty in the absence of explicit tax provisions, issues in identifying the tax jurisdiction, anonymity of the taxpayer in crypto-transaction, lack of information about third party etc. In the suggestion mention explicit statutory provision, having separate mandatory disclosure requirements in tax returns on the taxpayers as well as all the intermediaries involved, strengthening existing international legal framework etc.
- Conclude by mentioning that a streamlined tax regime will be essential in the formulation of a clear, constructive and adaptive regulatory environment for cryptocurrencies.
Q3
Dhruv
Introduction is fine.
In next part, first mention what are the existing provisions that can be used for taxing cryptocurrency.
Although IT Act 1961,doesn’t explicitly mention crypto; it’s ambit can be increased under capital gains, other business transactions etc- so you can frame that point better.
Give subheadings before writing points for each section; after writing about existing provisions you can give a subheading for ‘challenges in taxation’.
Points regarding jurisdiction, anonymity etc are good. You can also mention difficulty in coming at a fair market value for cryptos, lack of information about third party etc
Way forward also has some good points, however other than global regime mention some steps which can be taken domestically such as having explicit statutory provision, having separate mandatory disclosure requirements in tax returns on the taxpayers as well as all the intermediaries involved etc
To tackle some subsections you can use flowcharts- will help in making the content concise as well as more presentable.
Conclusion is fine.
Keep practicing. 🙂