India proposes 30% tax on income from digital assets

Union government of India while presenting union budget 2022 has proposed 30% tax on income from transfer of virtual digital assets such as cryptocurrenies and NFTs.

To capture details of all crypto transactions, Nirmala Sitharaman also proposed a 1% tax deduction at source (TDS) on payments made related to purchase of virtual assets.

No deduction in respect of any expenditure or allowance shall be allowed while computing such income except cost of acquisition. Further, loss from transfer of digital asset cannot be set off against any other income.

Gift of virtual digital asset is also proposed to be taxed at the hand of the recipient.

The budget also proposed launching a digital rupeed by central bank of India (RBI) by next year. “Introduction of a central bank digital currency will give a big boost to digital economy. Digital currency will also lead to a more efficient and cheaper currency management system,” Finance minister added.