Taxation in Crypto World! Your loss is your loss and Your gain is Government's Gain!

Guest | Last updated: 07 February 2022

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India's Finance Budget 2022-23 introduced a 30% tax on Virtual Digital Assets (VDAs), including cryptocurrencies and NFTs. This move aims to clarify existing ambiguities in taxation. Losses from VDAs cannot be offset against other income or carried forward, and only the cost of acquisition is deductible. A 1% TDS on transactions is also introduced, though details are pending. Gifts of VDAs are taxed at 30%, unless received from a relative.

Arjuna (Fictional Character): Krishna, Honourable Finance Minister Mrs. Nirmala Sitharaman had declared the Finance Budget of 2022-23 on 01st February in the Lok Sabha. And this year the government decided to tax Virtual digital assets (VDA) so what was the reason behind doing this? Krishna (Fict

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FAQ :

Virtual Digital Assets (VDAs) are any digital representation of value that can be traded, transferred, or used for payment, generated through code or cryptography. This includes cryptocurrencies, NFTs, and ETFs.

The Indian government has imposed a flat tax rate of 30% on the transfer of Virtual Digital Assets (VDAs).

No, losses incurred from Virtual Digital Assets (VDAs) cannot be set off against any other head of income, nor can they be carried forward to the next financial year.

Only the cost of acquisition is allowed as a deduction. Other expenses incurred, such as depreciation or trading expenses, are not permitted as deductions.

Gifts of Virtual Digital Assets (VDAs) are taxed at 30%, and they are included in the definition of property for tax purposes. However, gifts received from relatives are exempt from this tax.

The mere taxation of income from Virtual Digital Assets (VDAs) does not automatically legalise them in India. The government is still deliberating on the legal status of cryptocurrencies.