Definition of Crypto Assets:
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The Finance Bill, 2022 has for the first time provided a definition for crypto assets.
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According to the definition, any information or code or number or token generated through cryptographic means or otherwise providing a digital representation of value exchanged with or without consideration that can be transferred, stored, or traded electronically can be defined as “virtual digital assets”.
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Essentially, the Finance Bill has provided for a definition of virtual digital assets which is wide enough to cover emerging digital assets, including non-fungible tokens (NFTs), assets in the metaverse, digital currencies and tokens, among others.
Digital Rupee: Reserve Bank of India will launch a Digital Rupee – India’s version of a Central Bank Digital Currency (CBDC) by 2022-23. The CBDC will be backed by blockchain technology.
Tax on Crypto Assets:
The Finance Minister has proposed that transfer of any virtual/ cryptocurrency asset will be taxed at 30%.
No deduction except the cost of acquisition will be allowed, and no loss in transaction will be allowed to be carried forward.
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In order to monitor the money trail in crypto deals, a 1% Tax deduction at Source(TDS) will be imposed on every transaction using cryptocurrencies.
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Further, gifts in virtual digital assets would be taxed in the hands of the recipient.