Taxation of Cryptocurrency or VDA in India. Budget Proposal 2022. Quick review by CA Umesh Sharma

Описание: Taxation of Cryptocurrency or VDA in India. Budget Proposal 2022. Quick review by CA Umesh Sharma

#VDA #Taxation #Cryptocurrency

The Finance Budget 2022-2023 came up with the proposal to levy tax on cryptocurrency or virtual digital assets mainly because in recent years there were lot of people dealing in virtual digital assets and there were also ambiguities over taxation of virtual assets among the taxpayer.

The Finance Budget 2022-2023 has come up with introduction of various provisions to cover virtual digital assets within the tax ambit of income tax; TDS and gift tax.

Virtual digital assets mean as under –
• Any information/ code/ number/ token generated through cryptographic means or otherwise providing a digital representation of value exchanged with or without consideration;
• A non-fungible token or any other token of similar nature;
• Any other notified digital asset.

The Finance Budget 2022-2023 proposes taxation of cryptocurrency in the following manner –
• Section 115BBH is proposed to be inserted into the Income Tax Act;
• It is decided to tax virtual digital assets at the rate of 30%;
• No set off will be available against the losses incurred from the virtual digital assets against any other head of income;
• Losses from the virtual digital assets cannot be carried forward to the next year;
• No expenses will be allowed as deduction other than cost of acquisition;
• The provisions are made effective from 1st April 2022.

New TDS provision with respect to transactions of cryptocurrencies is explained hereunder –
• Section 194S is proposed to be inserted into the Income Tax Act;
• TDS at the rate of 1% is deductible on each transaction of virtual digital assets.

New gift provision with respect to transactions of cryptocurrencies is explained hereunder –
• Virtual digital asset is included in the list of property defined under section 56(2)(x);
• Gifts of the virtual digital asset is taxable at the rate of 30%.


Follow us -
Website: https://taxguru.in/
Facebook:   / taxguruin  
Twitter:   / taxguru_in  
LinkedIn:   / profile  
Instagram :   / taxguruin