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Ajay Konale, 28, started dabbling in the cryptocurrency market\u00a0in 2020. But he did not get into it for the money. Not directly, anyway.
Konale, a Bangalore-based\u00a0chartered\u00a0accountant\u00a0(CA), had just started his own auditing firm with a partner and he identified a clear dearth of qualified accountants to advise investors\u00a0who are\u00a0part of India\u2019s burgeoning cryptocurrency market.
It was a new world, seemingly different from the work CAs have been\u00a0doing. But Konale firmly\u00a0believed\u00a0that \u201ca traditional practice will have a limited future.\u201d He dived into cryptocurrencies,\u00a0starting as an investor.<\/p>\n
\u201cThe fundamental accounting principles\u00a0are\u00a0the same for crypto currencies. But traditional CAs are not familiar with the ecosystem, so they run away,\u201d Konale said. Also read: Crypto Diamond Clears Up Confusion About Cryptocurrency in this Open Discussion<\/a><\/p>\n Crypto specialist CAs
\u201cThat\u2019s why I started investing. I wanted to understand the ecosystem before getting into accounting it,\u201d he\u00a0added.
Konale is among a handful of Indian CAs who, over the past five years, have taken the plunge into\u00a0the crypto current market,\u00a0offering their services\u00a0to\u00a0investors. And with 2022-23 being the first year of the Indian government levying a 30 per cent\u00a0tax<\/a>\u00a0on cryptocurrency transactions, the role of these CAs has become even more important.<\/p>\n
According to\u00a0data<\/a>\u00a0from Tracxn, a start-up tracking firm, investments in India\u2019s cryptocurrency market swelled 15.5 times to\u00a0$438.18 million\u00a0in 2021.
Most\u00a0cryptocurrency\u00a0accountants, like Konale, are young,\u00a0in their late 20s, and while Konale\u2019s auditing firm offers other regular auditing services as well, there are some who have decided to specialise in cryptocurrency. The clients of these firms are also mostly in the age group of 20 to 40 years from Tier-1 and Tier-2 cities.
\u201cThere was a considerable lack of knowledgeable advisors\u00a0before 2020,\u201d said 29-year-old Anoush Bhasin, founder of Delhi-based Quagmire Consulting, which\u00a0solely\u00a0focuses on crypto assignments.\u00a0But\u00a0the Supreme Court\u2019s\u00a0ruling<\/a>\u00a0against the Reserve Bank of India\u2019s ban on crypto currencies in 2020 and the Covid\u00a0pandemic changed it all and\u00a0the industry\u00a0also\u00a0started\u00a0to look more creditable.
\u201cNow with the new tax rules, a number of CA firms are jumping in,\u201d added Bhasin who quit his job with one of the Big Four audit firms in\u00a02018 to pursue a \u201cmore thrilling\u201d\u00a0career.
\u201cHaving developed a keen interest in Bitcoin, I saw a huge vacuum in crypto-friendly regulatory and tax advice in India. I decided to help investors, traders, entrepreneurs to legitimately enter and exit the crypto market,\u201d Bhasin said.
Bhasin\u2019s clients are mostly high frequency traders, long-term investors,\u00a0high net-worth individuals, software developers and consultants.\u00a0And they are all\u00a0young with a considerable risk-taking appetite.
Abhinav Soomaney,\u00a028,\u00a0started his accounting career with crypto assignments with a firm in the United States.
\u201cI was lucky to get into this space when cryptocurrency taxes were just being discussed (globally). A colleague and I sat together and created a template for crypto taxation. We are using the same template today in India,\u201d Soomaney said. In 2020, he founded Cryptotax International, the Indian arm of which is working on a new software for the Indian market to help investors directly link their exchanges and get the tax calculation in just a few clicks.
\u201cRight now, Indian clients are not worried about tax. We get calls\u00a0from people enquiring about what we\u00a0charge\u00a0and\u00a0when can we get started,\u201d said Soomaney.\u00a0He\u00a0has over 300 clients, mostly international, who he has been assisting on and off. \u201cThere is a great demand because there are very few accountants doing it.\u201d<\/p>\n