Recently, the Indian government has made some significant changes in its approach to cryptocurrencies and virtual digital assets (VDAs). 

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One of the most notable developments is the extension of the Prevention of Money Laundering Act (PMLA) to include cryptocurrencies, which means that crypto transactions and NFTs will now be considered money laundering under Indian law.

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This move aims to regulate the use of these digital assets and address the concerns of law enforcement agencies regarding illegal activities, such as money laundering and terror financing, associated with the crypto sector. 

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Crypto exchanges will now have to comply with anti-money laundering (AML) provisions and regulations, such as verifying the identity of customers, reporting suspicious transactions, and maintaining records.

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The inclusion of cryptocurrencies in the PMLA is a positive signal for the Indian cryptoverse as it signals the government's recognition and acceptance of crypto as a legitimate asset class. 

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Indian crypto exchanges have welcomed the move and have stated that they are already following the AML norms and best practices.

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However, the government has also announced a specific tax regime for crypto in India in the Budget 2022. The finance minister has proposed a flat 30 percent taxation on income from crypto and digital assets and a 1 percent tax deducted at source (TDS) on the sale of crypto assets exceeding more than Rs 50,000 (Rs 10,000 in certain cases) in a single financial year. 

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This means that crypto investors and traders will have to pay a high tax rate on their profits and report their transactions and holdings to the tax authorities.

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While this tax regime may have a negative impact on the crypto industry, it will bring more clarity, regulation, and compliance to the sector. The users will have to be more careful and responsible with their crypto transactions and investments, and also pay their taxes accordingly. 

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The tax on crypto will also affect the profitability and attractiveness of crypto as an asset class and may influence the demand and supply of crypto in the market.

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It's worth noting that the Indian government is still working on a comprehensive bill to regulate cryptocurrencies in India, which will provide more clarity on the legality and treatment of cryptocurrencies in the country. 

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However, the PMLA extension is a significant step towards greater regulation of the crypto sector, and it remains to be seen how it will impact the industry, companies, users, and tax on crypto in the long run.

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