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Background

Govt. to tax VDAs at 30%

India has highest crypto owners

No regulation/ban on its trading

Observations
  • A Nasscom & WazirX report has forecasted that investments by Indians in cryptocurrency could touch $241 million by 2030.
  • In the Budget 2022, Finance Minister Nirmala Sitharaman announced that income from the transfer of any virtual assets will be taxed at 30%.
  • Even a gift of a virtual digital asset is also proposed to be taxed at the hand of the recipient.
  • Virtual Digital Assets (VDAs) mainly include crypto currencies, non-fungible token (NFT), etc. Prima facie, this excludes digital gold, central bank digital currency (CBDC) or any other traditional digital assets, and hence aimed at specifically taxing cryptocurrencies.
  • Further loss from transfer of such assets cannot be set off against any other income.
  • This is at par with the highest income tax slab applicable to individuals with an income in excess of Rs.15 lakhs per annum.
Results
 Proper Asset Allocation

Capital Gains

Cryptocurrency prior to April 1, 2022 could be taxable as capital gains or as income from business.

 Proper Asset Allocation

Govt. Recognition

A sets a clear demarcation between the currency (legal tender) and other crypto assets for Indians.

 Proper Asset Allocation

Crypto Assets

The Rs.4000 each into 3 funds grew at the rate of 12%