Budget 2022: Virtual Digital Assets like NFTs and Cryptocurrencies will now be taxed at 30% in India, no ban
Finance Minister Nirmala Sitharaman did not mention cryptocurrencies or non-fungible tokens in her Budget speech, but the Finance Bill makes it clear which assets fall under the purview the proposal to tax ‘virtual digital assets.’
In her Budget Speech 2022, Finance Minister Nirmala Sitharaman said that 30% tax would charged on income from transfer of virtual digital assets. She further said no set off will be allowed in case of losses. Also, gifts in virtual digital assets would be taxed in the hands of the recipient.
Further, loss from transfer of virtual digital asset cannot be set off against any other income and it will be hard to escape the taxman’s radar.
In order to capture the transaction details, 1 percent TDS above a monetary threshold on payment made in relation to transfer of virtual digital asset.
The crypto industry and experts have welcomed the 30% tax rule for digital assets income. Not just this, there was no negative impact on prices of most of the popular crypto tokens including Bitcoin, ETH, WRX, SOL, ADA, DOGE, MATIC listed on Indian exchanges.
And what exactly constitute digital assets?
From the Finance Bill:
(a) Any information or code or number or token (not being Indian currency or foreign currency), generated through cryptographic means or otherwise, by whatever name called, providing a digital representation of value exchanged with or without consideration, with the promise or representation of having inherent value, or functions as a store of value or a unit of account including its use in any financial transaction or investment, but not limited to investment scheme; and can be transferred, stored or traded electronically;
b) A non-fungible token or any other token of similar nature, by whatever name called;(c) Any other digital asset, as the Central Government may, by notification in the Official Gazette specify.
