Virtual Digital Assets
✓The government in the union budget fro 2022-23 new provisions aimed at taxing and tracking Virtual Digital Assets. Along with the framework for taxation, the Budget for the first time defined virtual digital assets.
✓It has defined virtual digital assets in the newly inserted clause (47A) under Section 2 of the Income Tax Act, 1961.
✓VDA has been defined to mean any information or code or number or token (not being Indian currency or any foreign currency), generated through cryptographic means, with the promise or representation of having inherent value.
✓VDAs mean cryptocurrencies, DeFi (decentralised finance) and non-fungible tokens (NFTs)
✓From April 2022, India introduced a 30% Income tax on gains made from crypto currency
✓In July 2022, rules regarding 1% tax deducted at source on cryptocurrency came into effect.