Giving cryptocurrencies as Diwali gifts? Know taxes on them

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The cryptocurrency market has gained quite a fanbase in the past few years. Companies and individuals across countries have warmed up to using cryptos as an investment pool. The popularity of cryptos is vast and in current times they are even seen as an alternative to cash which means you can buy goods and services, receive salaries, etc. Despite the market being volatile and highly sensitive driven, demand for cryptocurrencies has not budged instead only accelerated. That being said, one would wonder if cryptocurrencies can be given as gifts, especially during the upcoming Diwali festival. However, that's not all, there is certain taxability that needs to be taken into consideration upon receiving cryptos as gifts.

Cryptos are digital currencies and one of the alternative forms of payment that are developed through encryption algorithms. They perform as both currency and virtual accounting systems. 

According to Income Tax guidelines, gifts from the taxation point of view are defined as:

- any sum of money received (monetary gift)

- specified movable properties (gift of movable property) specified movable properties received at a reduced price (i.e. for inadequate consideration)

- immovable properties received without consideration (gift of immovable property)

= and immovable properties acquired at a reduced price.

Simply put, taxes are applicable on monetary gifts, however, a certain limit of exemption is provided in a financial year.

In regards to cryptocurrencies as Diwali gifts to an individual, Abhijit Shukla, CEO & Founder of Revolution Games said, "The interest in NFTs and cryptocurrencies, as a form of currency, is on the rise, especially among GenZ and millennials. In fact, cryptocurrencies as Diwali gifts