Budget gives crypto some clarity but more importance to Digital Rupee

economictimes.indiatimes.com:

cryptocurrency bill in Parliament. However, the government has smartly sidestepped on the legality of cryptocurrencies while showing its disinclination to support these, by levying a huge tax burden on those making money from such virtual digital assets, as the Finance Bill has tried to define it. The Finance Bill 2022 proposes to introduce a new phrase called virtual digital assets, which has a very wide definition encompassing all forms of digital assets including cryptocurrencies and non-fungible tokens. It has also added them to the expression “property”. Any transfer of virtual digital assets is proposed to be taxed at a higher rate of 30 per cent. Furthermore, no deductions would be allowed in computing the income arising from such assets, other than their cost of acquisition. More importantly, they have also proposed to tax the recipient of any such asset transferred without any consideration — for example, by way of a gift. It is also pertinent to note that any loss suffered from transfer of a virtual digital asset cannot be adjusted against any other source of income. The Central Board of Direct Taxes also plans to issue further guidelines concerning taxation of virtual digital assets, ironing out any leftover creases.

Did you Know?

Sunny Leone took the lead among Indian actors to secure her digital assets when she broke the news about her association with NFT, two months back. This made her the first Indian actress to mint NFTs

With an intention to capture transfers of such virtual digital assets, any person responsible for making any payment to acquire them shall be liable to deduct tax at source (TDS) at the rate of 1 per cent. Individuals who are not subject to tax audit are