Explained: What tax proposals on digital assets mean for cryptocurrency investors in India

cnbctv18.com:

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.’First the proposal:Any income from transfer of any virtual digital asset shall be taxed at the rate of 30 per cent.

No deduction in respect of any expenditure or allowance shall be allowed while computing such income except cost of acquisition.Some more bad news here (just in case you were thinking of faking losses to offset your profit)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 radarIn order to capture the transaction details, 1 percent TDS above a monetary threshold on payment made in relation to transfer of virtual digital asset.(Forget about the anonymity cover that cryptocurrencies were supposed to offer)Also read: RBI to introduce Digital Rupee using blockchain starting 2022-23And 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