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Taxation Of Virtual Digital Assets

Any income from transfer of any virtual digital asset taxed at the rate of 30 percent – wef 1 April 2022

No deduction in respect of any expenditure (other than cost of acquisition) or allowance or set off of any loss shall be allowed to the taxpayer while computing income from transfer of such asset.

No set off of any loss arising from transfer of virtual digital asset shall be allowed against any income computed under any other provision of the Act and such loss shall not be allowed to be carried forward to subsequent assessment years

Section 56(2)(x) is proposed to be amend the definition of “property” to include “virtual digital asset” – Transfer of virtual digital assets at inadequate consideration to be subject to tax in the hands of the recipient

Virtual digital asset is defined to mean 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

Introduction of section 194S – Deduction of TDS on payment for transfer of virtual digital asset to a resident at the rate of 1 percent if the payment exceeds the threshold limit – wef 1 July 2022

Threshold limit in case of an individual/ HUF whose business turnover does not exceed INR 1 crore is INR 50,000. In other case, the threshold is INR 10,000

A transaction in respect of which tax has been deducted under this section shall not be liable to deduction or collection of tax at source under any other provisions

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Crypto Taxation

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