During the Union Budget 2022 speech, Finance Minister Nirmala Sitharaman acknowledged crypto assets through a tax, announcing that income from the transfer of any virtual digital asset (VDA) — including all types of cryptocurrencies and NFTs — will be taxed at a flat rate of 30 percent.
Although India’s blockchain and crypto industry is still awaiting a Crypto Bill defining these digital assets more clearly, leaders from the nation’s top crypto exchanges reacted positively to the new digital assets tax regime and CBDC rollout plans.
However, there is a need to take a closer look at this crypto tax as the FM also announced that no deduction is possible for any expenditure or allowance while computing income from the transfer of digital assets, except the cost of acquisition of the VDA.
“Loss from transfer of virtual digital assets cannot be set off against any other income, and gifting virtual digital assets will be taxed in the hands of the recipient,” she said in her speech.
The Decrypting Story breaks down what some of the top entries from the Finance Bill mean for the new crypto tax.
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