You might doubt one surprising reality, that is, India is the country with the highest number of cryptocurrency owners in the world. The NASSCOM, in collaboration with WazirX, created a report based on research describing the huge growth in the Crypto-Tech industry in India. 

What does the research say?

According to the anticipation of the research, Indians will be investing around 241 million dollars in the Crypto market in the upcoming 10 years. Keeping in mind this prediction, RBI is making its plan to adopt a digital rupee. The best part of digital currency is that the selling and purchasing of the Digital rupee are open daily for 24 hours.

Classification of digital assets

The budget 2022-2023 defined by the finance ministry of India was unclear whether a digital asset is a currency, security, or commodity. In a situation of uncertainty, the virtual digital asset should be acknowledged as capital assets when taxpayers purchased them for investment. According to the Income-tax, the capital asset in property belonging to a person, irrespective of the connection of that property with his profession. 

Your property can be of any definition, and its scope hasn’t been limited under this section:

There are major three types of digital assets:

-Capital Gains

-Business Income

-Income from other Sources

Let’s see how the taxation rule of digital assets applies to different countries in the USA:

Taxation of Digital Assets in the USA

The annotation cryptocurrency looks like it is a currency, but isn’t true at all. Cryptocurrency is regarded as a property, and the tax depends on income tax brackets and short-term and long-term capital gains. 

Here is the detail about taxes on digital assets in the USA:

How digital assets taxation worked in India- A chronological analysis

2013: 

Reserve bank of India informed cryptocurrency holders with cautioned messages stating potential financial, operational, and security risks involved in the transactions of digital assets.

2017:

Finance Ministry of India and Reserve bank of India warned cryptocurrencies as illegal tender. Also, PIL was filed in Supreme Court on the ban on selling and buying of cryptocurrencies.

2019:

Bill passed by the Government of India for the official ban of cryptocurrency. The official digital currency bill act was presented to impose a complete ban on all activities involved in cryptocurrency including the sale, purchase, holding, and mining.

2020:

Banks and financial institutions were allowed to access to banking services involved in crypto assets transactions.

2022:

The finance bill proposed by the finance ministry with an amendment to the Income-tax act imposed taxes on digital assets.

Conclusion

The Government of India hasn’t offered any laws to govern, regulate or stop the transaction in Digital Assets. This is why an inference can be made which isn’t illegal digital assets or set up a cryptocurrency exchange in India. Well! It is not only India imposing taxes on digital currencies. 

Reserve bank of India also declared India’s first central bank digital currency project named “The Digital Rupee’. Reserve bank of India will be the sole owner and guarantor of this brand new Indian digital currency.

According to the Income-tax Act, this concept of tax on digital assets wasn’t legal, therefore the Government of India after bringing an amendment to the act has started levying tax on income from digital assets from April 1, 2022.

During the past few weeks, India Legal’s editors have focussed their energies on generating analytical and look-ahead stories on the delivery of justice when all judicial systems have been turned topsy-turvy by the turbulence generated by the corona pandemic. Indian courts—the most crowded of public venues, next only to railway stations—make social distancing impossible. So they have remained closed. But that does not mean that the portals of justice have been slammed shut in the faces of litigants seeking succour and relief.

Necessity being the mother of invention, Indian courts, like their sister institutions in countries governed by the rule of law and modern jurisprudence, have been adapting by resorting to virtual trials and hearings, digitisation of rosters, cause lists and case files and video-conferencing. There is no choice.

As Chief Justice SA Bobde elegantly summed up what is becoming the new normal for the judiciary, the pandemic has forced a re­think on how to function and what is essential in the judicial process.

He stated: “The real threat came in March and I am happy that the Supreme Court was one of the first institutions to announce that it will not be open in a usual way and function in a restricted manner. This period has provided a compulsory training to prepare for a new working environment. There is no looking back. We will have to change the mindset regarding the way we look at court proceedings. This transition was not easy and it was difficult to deviate from the time honouring manner of functioning. This was the conflict between old and the new style of working.”

In related stories on this subject published in previous issues of the magazine, our analysts and legal correspondents outlined specific caveats and challenges. Virtual courts are by no means a panacea: “They present a variety of challenges and limitations, including data security and privacy concerns, the need for digitised files and the threat of reduced accountability. Perhaps the greatest challenge to virtual courts is the lack of emotional and intangible sensory connection enabled by physical proximity.”

The transition is by no means smooth. But hurdles are no reason to delay seeking alternative pathways. The rule of law cannot be allowed to succumb to a pandemic. The adjudicating presence of the courts is the lifeblood of democracy.

Our analysts are of the opinion that virtual courts could help the disposal rates of cases. These will reduce as judicial officers and clerks learn new technologies which ensure social distancing. Court clerks will have to undergo intensive training—from video-conferencing, soft storage of information and evidence to registry maintenance.

One of our writers predicts: “Daily hearings will shrink as judges try to manage their dockets and keep out those cases which do not require the personal presence of clients as in civil cases. This may become problematic as most clients and advocates are geared towards personal presence and arguments.”

Advocate Preeti Ahluwalia writes in this week’s cover story (read here) that the coronavirus “will turbo-charge the legal industry’s transformation. It will propel law into the digital age and reshape its landscape”.

The entire legal ecosystem will be affected—consumers, providers, academies and the judicial system, she predicts. “Digital transformation has been a C-Suite priority for years, but the legal industry has hardly taken notice of it and is unprepared. Coronavirus will change that.”

The most important thing law is learning from this pandemic is the need to have alternative means and methods for doing jobs. The legal sector “has generally been very slow to adopt new technology that can save time and money and has tenaciously clung to traditional ways of doing things.

“Even after the global financial crisis, law firms adjusted at the margins—furloughs, reduced rack rates and internal cost-cutting measures. This time, things will be different; the changes will be broad, deep and enduring.”

Covid-19 has had an unparalleled impact on everyday life, globally. Governments have issued instructions to self-isolate, entire industries and countries are in lockdown and new information is disseminated on a daily basis. The pandemic has had a colossal impact on markets, businesses and working life. While the scourge of Covid-19 will pass, when and at what cost is the moot question. And what are the new challenges and lessons the legal fraternity can learn from it?

AN EXPERIMENT IN APPROACH TO LAW

The coronavirus will turbo-charge the legal industry’s transformation. It will propel law into the digital age and reshape its landscape. The entire legal eco­system will be affected—consumers, providers, academies and the judicial system. Digital transformation has been a C-Suite priority for years, but the legal industry has hardly taken notice of it and is unprepared. Coronavirus will change that. It will produce a swift, comprehensive, top-to-bottom re-imagination of the legal sector.

The most notable impact Covid-19 has had on a vast majority of workers is the impetus to work from home. No doubt, remote working has its own benefits for the three key stakeholders concerned—law firms, lawyers and clients. For law firms, working remotely has been shown to boost productivity, helped attract top talent and offered more options for clients to interact with them beyond the brick and mortar walls of their offices.

For lawyers, flexible working policies have helped balance commitments at home, eliminated lengthy commutes and given a greater degree of control as to when and how they want to do their work. Lastly, remote working has helped clients access sources of legal knowledge without having to travel to offices.

The use of cloud-based platforms for the distribution of files and information underpins benefits to these three stakeholders by allowing employees to work on matters from wherever they are based, at any time.

The most important thing law is learning from this pandemic is the need to have alternative means and methods for doing jobs.

The legal sector has generally been very slow to adopt new technology that can save time and money and has tenaciously clung to traditional ways of doing things. Even after the global financial crisis, law firms adjusted at the margins—furloughs, reduced rack rates and internal cost-cutting measures. This time, things will be different; the changes will be broad, deep and enduring.

The pandemic has made it necessary for lawyers and judges who have never used technology such as video-conferencing to conduct essential functions through them. Even after the pandemic passes, these changes will stay. And the legal profession should take advantage of the technological advances that are available to us.

One is using secure forms of video communication. Lawyers need to know how to securely access documents and enable quick, efficient communication with staff and clients. It has also become apparent that the siloed work of a lawyer needs to be expanded into the practical aspects of practising law.

For example, new lawyers need to be taught how to mail certified letters, how to call the clerk for scheduling, when and where to send important documents, how to send a fax (with or without a fax machine) and other seemingly “trivial” administrative tasks that are actually the backbone of the legal practice.

BIG LAW FIRMS

At a wider level, there is a recognition that businesses don’t need an office full of people or to be in a posh locality. Covid-19 exposes the vulnerability of congested workplaces and commuters and it may prove a pivotal point in considering whether law firms should look to move away from lavish-looking offices and focus on a more virtual office environment.

This could see a major change in how big law firms operate and work in the long run. With more people working from home, the need to commute to the workplace is proving non-essential. The government should also consider this carefully when planning future infrastructure. By encouraging more regional hubs and virtual offices, it will take huge pressure off the transport system, spread more wealth into other regions and crucially make it more difficult for viruses like Covid-19 to spread.

COURTS WILL GO DIGITAL

The justice system is at a virtual standstill at a time when it is most needed. This is the moment when courts around the world can be redesigned to be faster, more accessible, creative, scalable and efficient. A crippled justice system imperils our already flawed democracy. There are encouraging signs that judicial modernisation will occur.

Courts are going digital and assisting judges, lawyers, officials and litigants.

SUPREME COURT APPROACH

The Covid-19 crisis has pushed the Supreme Court to fast-track administrative reforms, a move that could speed up disposal of cases, digitisation of records and switching to paperless courts. On May 26, 2020, the apex court’s computer cell developed a software called SCI-Interact, to make all its 17 benches paperless. At an online seminar held recently to unveil the e-courts module, Chief Justice SA Bobde acknowledged that the pandemic gave impetus to the changes brought in during the lockdown period. These reforms will streamline access to the justice delivery system and make it affordable for litigants.

VIDEO-CONFERENCE HEARINGS

A day before the lockdown was announced on March 24, the top court switched to digital hearing of “urgent matters”. This restricted manner of working allowed social-distancing norms and reduced the footfalls in courts.

The Supreme Court adopted a new technology and opened itself to public scrutiny with video-conference hearings. Judges who rarely use the public address system during court proceedings have held online courts from residences, with lawyers addressing them from their offices, and, in some instances, their homes.

On May 2, 10 benches of the Supreme Court heard matters via video-conferencing, with 1,594 advocates joining. These hearings are being conducted through the Vidyo app under the management of the Supreme Court e-committee headed by Justice DY Chandrachud.

Initially, the Court began with two benches and gradually increased to ten. The number of cases before each bench has also increased. The Court further invoked its discretionary jurisdiction to permit all High Courts and trial courts to hold virtual hearings, subject to their own guidelines.

Ruchi Kohli, additional advocate general for Haryana in the Supreme Court, told India Legal: “Digital hearings are a positive change, though they cannot replace the old system. Future hearings should be a judicious combination of physical courtroom proceedings and virtual courts.” She added: “The new system has given an identity to Advocates-on-Record (AOR), who were only allowed to file cases and remained under the shadow of the senior counsel during hearings.”

E-FILING OF CASES

The Supreme Court’s e-committee has revised the existing e-filing system to design an interactive platform for lawyers and litigants to file cases on a 24×7 basis. Earlier, cases were filed at designated counters in the Court between 10 am and 5 pm on weekdays and before noon on Saturdays. The new facility incorporates online court fee payment, use of digital signatures and a digitised scrutiny mechanism to identify defects and objections in the petitions. All documents will be uploaded on the filing portal with signatures of the person filing it. A step-by-step guide is available to explain how digital signatures can be generated and used for filing. This e-sign facility is free of cost, especially for litigants and lawyers who do not possess a digital signature token or cannot afford to purchase it.

Online payments can be made through the Stock Holding Corporation of India. They can be paid by debit card, credit card, UPI or net banking through Atom Bank. Litigants who want to appear in person can register on the portal using paperless “Know Your Customer” mode by giving Aadhaar details.

Senior Supreme Court advocate Aishwarya Bhati said it was a positive move. “E-filing has been in the offing for almost two decades. You do not need two decades to toy with an idea. The pandemic has thrown challenges at us, and the institution has used this opportunity to integrate technology and use it as a force multiplier,” she told India Legal.

The contours of the post-corona legal world are taking shape. There are challenges and opportunities. Those who upskill and adopt a learning-for-life mindset will find opportunities. Others who stand pat, hoping that things will soon return to the before-corona world, will be redundant. Covid-19 will produce a thinning of the herd and a new legal industry. Embrace the challenge.

—The writer is an advocate in the Delhi High Court

Lead picture: karnatakajudiciary.kar.nic.in