Budget 2022: Virtual Digital Assets will now be taxed at the rate of 30%. How will it impact crypto, NFTs?

The Finance Minister tabled the budget at 11 am on February 1. President Ram Nath Kovind kicked off the Budget Session of the Parliament on January 31
Pic: Edexlive
Pic: Edexlive

In a move that is likely to impact cryptocurrency and non-fungible token (NFT) transactions in India, while presenting the Union Budget 2022 Finance Minister Nirmala Sitharaman announced that any income from the transfer of any "Virtual Digital Asset" (VDA) shall be taxed at the rate of 30 per cent. Moreover, those who receive VDAs as a gift will also have to pay the tax for them.

"There has been a phenomenal increase in transactions of Virtual Digital Assets, the magnitude and frequency of these transactions have made it imperative to provide for a specific tax regime," the Finance Minister said. She added, "Accordingly, for the taxation of the Virtual Digital Assets, I propose to provide that any income from the transfer of any Virtual Digital Asset shall be taxed at the rate of 30 per cent." 

She also said, "Gifts of Virtual Digital Assets are also proposed to be taxed in the hands of the recipient." No deduction in respect to any expenditure or allowance shall be allowed while commuting such income except the cost of acquisition, she said. 

"Further, the loss from the transfer of Virtual Digital Asset cannot be set off against any other income. In order to capture the transaction details, I also propose to provide for TDS (Tax Deducted at Source) on payment made in relation to the transfer of Virtual Digital Asset at the rate of 1 per cent, of such consideration above the monetary threshold," Sitharaman said. 

The Finance Minister tabled the budget at 11 am on February 1. President Ram Nath Kovind kicked off the Budget Session of the Parliament on January 31, following which FM Sitharaman presented the Economic Survey.

Last year's budget was the first one to be presented amid the COVID-19 pandemic and extensive farmers' protest. Announcing the Economic Survey last year, she had pegged the GDP growth at 11 per cent in the Financial Year 2021-22. But the Indian economy has come close to the projection. Advance estimates suggest that the Indian economy is expected to witness a real GDP expansion of 9.2 per cent in 2021-22, after contracting in 2020-21, said the latest Economic Survey.

Last year, the Union Budget allotted resources towards Aatmanirbhar Bharat Abhiyan extensively, be it in the social sector, energy, government reforms, migrant workers or agriculture. While the National Education Policy was the focus, the education sector saw a budgetary slash of 6 per cent from Rs 99 crores to Rs 93.2 crores last year.

Related Stories

No stories found.
logo
EdexLive
www.edexlive.com