Budget 2022: Taxation of Cryptocurrency and NFT in India

Shubham | Last updated: 03 February 2022

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The Indian Union Budget 2022 has introduced specific provisions for taxing cryptocurrencies and NFTs, defining them as 'Virtual Digital Assets' (VDAs). Income from the transfer of VDAs is taxed at a flat rate of 30%, with no deductions allowed except for the cost of acquisition. Losses from VDAs cannot be set off against other income and are not eligible for carry-forward. Additionally, a 1% Tax Deducted at Source (TDS) will be applicable on VDA transactions above certain thresholds.

The Union budget 2022 brought much-needed clarity on the taxation of cryptocurrency and NFTs. This was a requirement as the current regime did not offer any specific provisions for income arising from the sale and purchase of cryptocurrency and NFTs. This led to ambiguity as to how this income should be treated, with possible heads being Business Income, Capital Gains and Other Sources. Since each head offers different ways of calculation of income, it became necessary for the government to prov

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About the Author

Shubham

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Hello Everyone Am a practising Chartered Accountant based in Noida. I have a passion for writing and hope to share my articles here and gain knowledge from fellow members. Blog- www.finlens.in

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