30% tax on virtual digital assets like Crypto
As per money control, Finance Minister Nirmala Sitharaman while presenting Budget 2022 announced that virtual digital assets will be taxed and any income from transfer of such asset shall be taxed at 30 percent.
Priyanka Khimani, global IP Legal and Business expert said that this is intended to bring digital assets such as cryptocurrency and NFTs (non-fungible tokens) into the fold.
The NFT space in India started gaining steam since last year when Bollywood celebrities like Amitabh Bachchan and sports stars like Yuvraj Singh launched their digital collectibles. “One of the demands of IndiaTech.org was to come out with the term for the virtual digital asset class and that there should be clarity on taxability. Non-fungible tokens (NFTs) have been also defined in the Budget,” said Rameesh Kailasam, CEO, IndiaTech.org.
While some in the NFT industry are welcoming clarity on taxability, others raised concerns on the hefty tax rate.
“Capital gains would expectedly attract tax, however twice the regular rate is a curious outcome. It’s certainly a dissuasive decision since a few traders/investors do make outsized gains but it does still allow for the sector to function,” said Dhruv Saxena The Chief Strategy Officer of Vistas Media Capital.