Taxation of Crypto in India
1. Section 2(47A) has been inserted in the Income Tax Act, 1961 which refers the cryptocurrency and NFTs as Virtual Digital Assets (VDAs).
2. VDA means any information or code or number or token, other than any fiat currency, generated through any cryptographic means. In short, it means all types of crypto assets, including NFTs, tokens, and cryptocurrencies but it doesn’t not include gift cards or vouchers.
3. As per Sec 115BBH, Profits earned by trading in cryptocurrency is taxable at 30%.
4. As per Section 194S, TDS shall be deducted at 1% if the value of transactions exceeds ₹ 50,000 in a financial year.
5. The buyer shall be responsible to deduct TDS and deposit it with the Government or the trading platform shall be responsible to collect the TDS.
6. No setoff of losses is available in case of trading in VDAs. There’s no provision of deduction of costs or expenditure.
7. Amendment has been made in the Schedule III of the Companies Act. Now, every company has to disclose its gains and losses in virtual currencies. Also, the value of VDAs as on the date of Balance Sheet shall be disclosed.
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