Despite the fact that Parliament has introduced the Cryptocurrency and Regulation of Official Digital Currency Bill, cryptocurrencies continue to grow in popularity.
What are cryptocurrencies?
A cryptocurrency is a kind of digital asset; however, not all digital assets are cryptocurrency.
The characteristics that define crypto assets apart:
makes use of cryptography
is dependent upon distributed ledger technology
no need for a third party to issue crypto assets, such as a bank
Banks serve three major functions: as an investment vehicle, a medium of exchange, and a means of obtaining goods and services.
Cryptocurrencies such as Litecoin, Ripple, Bitcoin, and Ethereum are generally referred to as crypto assets.
What current taxation regulations apply to cryptocurrencies?
According to a conservative estimate, as many as ten crore Indians may already have assets worth more than ten million dollars.
While the Income Tax Act, 1961 does not expressly include cryptocurrencies, it has attempted to include them in its purview.
Cryptocurrency trading may be considered a transfer of a ‘capital asset,’ which is taxed as ‘capital gains.’
If such cryptocurrencies are kept as stock-in-trade and the taxpayer often trades in them, they will be taxed as ‘business income.’
Even if one claims that crypto transactions do not belong under the aforementioned categories, Section 56 of the IT Act applies, making them taxable under the heading ‘Other sources of income’.
What are the obstacles to taxing cryptocurrency transactions?
The absence of specific tax laws has resulted in confusion and a range of interpretations about calculation, appropriate tax heads and rates, loss and carry forward, and so forth.
Market participants have varied opinions on whether such money should be classified as ‘business income’ or ‘other sources of income,’ both of which are taxed at individual tax rate slabs.
Determining the value of the cryptocurrency and determining how such a transaction should be taxed are other issues.
Determining the tax jurisdiction for crypto transactions may be challenging, since taxpayers may have made several transfers across different jurisdictions.
Additionally, the bitcoins may have been held in online wallets hosted on servers located outside India.
Taxpayers who use cryptocurrencies maintain their anonymity since each crypto address is composed of a string of alphanumeric characters rather than the taxpayer’s actual identity.
Tax evaders have been exploiting cryptocurrency transactions to store their illicit funds overseas and support criminal activity, terrorism, and other illegal activities.
Absence of third-party information on crypto transactions makes it more difficult to scrutinise and detect cases of tax avoidance.
The Internal Revenue Service employs CASS, or computer-aided scrutiny selection, to pick taxpayer returns based on information received from third-party intermediaries such as banks.
However, cryptocurrency market intermediaries such as exchanges, wallet providers, network operators, miners, and administrators remain unregulated, leaving tax authorities to rely on taxpayer-provided data.
Even though cryptocurrency market intermediaries are regulated and adhere to Know Your Customer (KYC) standards, a situation exists in which actual cash or other goods/services are exchanged for cryptocurrencies.
Such transactions are difficult to track, and the tax evaders may be identified either by voluntary disclosures from the parties involved or through a search/survey operation.
How can the difficulties be overcome?
The income-tax rules governing crypto transactions must be clarified by including a definition for crypto-assets and promoting widespread knowledge among taxpayers.
A separate mandatory disclosure requirement in tax returns (as is the situation in the United States) should be imposed on taxpayers and any intermediaries involved, to ensure that crypto transactions are not unreported.
Strengthening the international legal framework for information exchange—The current international legal framework for information exchange should be enhanced to allow for the collection and sharing of data on crypto transactions.
The government must educate its employees about blockchain technology.
It is worth noting that the United Nations Office on Drugs and Crime’s ‘Cybercrime and Anti-Money Laundering’ Section (UNODC CMLS) has produced a cryptocurrency training curriculum to assist tax officials in comprehending the underlying technology.
Tax authorities should arm themselves with cutting-edge forensic tools (such as Elliptic Forensics Software, which is used in the United States, and Graph-Sense, which is used in the European Union) that can analyse and detect questionable transactions.
State Forest Report 2021 Analysis
Why in news?
India’s State of Forest Report (ISFR) 2021 has been issued by the Ministry of Environment, Forests, and Climate Change (MoEFCC).
What is the India Forest Status Report?
It is a forest and tree cover estimate of India.
It is issued every two years by the Forest Survey of India on behalf of the Ministry of Environment, Forests and Climate Change.
The survey’s initial edition was released in 1987. ISFR 2021 is the seventeenth.
Data are derived from a comprehensive mapping of India’s forest cover using remote sensing methods.
ISFR is utilised in the planning and development of policies pertaining to forest management, forestry, and agroforestry.
What are the most significant findings?
Forest cover expansion
Over the last two years, forest and tree cover have increased.
Forest cover in India –
7% in 2020
6% in 2019.
Tree cover rose by 721 square kilometres.
The states with the greatest rate of growth, in order –
The area covered by mangroves has risen by 17 square kilometres.
Bamboo forests increased by 53,336 million culms (stems) from 13,882 million culms in 2019 to 53,336 million culms in 2021.
The country’s total carbon stock is anticipated to be 7,204 million tonnes, an increase of 79.4 million tonnes from 2019.
Reduced forest cover
Five North-eastern states — Arunachal Pradesh, Manipur, Meghalaya, Mizoram, and Nagaland – have seen forest cover loss.
35% of the forest cover is at risk of forest fires.
What accounts for the North Eastern states’ decline?
Mizoram’s forest cover accounts for 84.5 percent of its overall geographical area and It is 79.3 percent in Arunachal Pradesh.
The two states have lost 1.03 percent and 0.39 percent of their forest cover, respectively.
Manipur has lost 1.48 percent of its forest, Meghalaya has lost 0.43 percent, and Nagaland has lost 1.88 percent.
The drop is a result of human activities such as shifting agriculture, development pressure, and tree removal.
What is the source of concern?
The north-eastern states are biodiverse hotspots.
As forests deteriorate, the effect of landslides will rise.
Influence the region’s water catchment
Difficulties arising from the disparate ownership patterns – common ownership vs protected tribal territory.
What else is included in the report?
ISFR 2021 has many new features.
For the first time, forest cover has been quantified in tiger reserves, tiger corridors, and the Gir forest, which is home to the Asiatic lion.
From 2011 to 2021, forest cover in
Tiger corridors have been expanded by 37.15 square kilometres (0.32 percent),
Tiger reserves have shrunk by 22.6 square kilometres (0.04 percent).
Over the last decade, forest cover has grown in 20 tiger reserves and declined in 32.
The Buxa, Anamalai, and Indravati reserves have seen an increase in forest cover, whereas the Kawal, Bhadra, and Sunderbans reserves have seen the greatest losses.
Arunachal Pradesh’s Pakke Tiger Reserve has the greatest forest cover (nearly 97 percent).
What will the consequences of climate change be?
By 2030, 45 percent of forests will be affected.
All states, with the exception of Assam, Meghalaya, Tripura, and Nagaland, would be very vulnerable climatic hotspots.
Ladakh (0.1-0.2 percent forest cover) is anticipated to be the most impacted.
India’s forests are already exhibiting shifting trends in vegetation types, while Sikkim’s 124 indigenous species have shown a change in their vegetation pattern.
SNPP VIIRS sensor detects forest fire hotspots –
2 lakh in 2019-20
4 lakh in 2020-21.
Odisha, Madhya Pradesh, and Chhattisgarh had the greatest number of fires.
What are the survey’s shortcomings?
Forest cover includes plantations such as coffee, coconuts, and mango.
A forest survey is conducted to ascertain India’s biodiversity. According to experts, such a broad poll would fall short of that purpose.
Ethics | Paper – IV
Tolerance is the practice of respecting, accepting and appreciating individuals whose beliefs, behaviours, race, religion, or nationality are unlike one’s own.
Tolerance, according to UNESCO, is the recognition, acceptance, and appreciation of the great variety of our world’s cultures, modes of expression, and ways of being human.
Gandhiji and Martin Luther King utilised tolerance to win their battles against injustice.
There are many things that happen because people don’t have enough tolerance. Mob lynching, communalism, racism, and other things happen because people don’t have enough tolerance.