TAXABILITY OF VIRTUAL DIGITAL ASSETS U/S 115 BBH

TAXABILITY OF VIRTUAL DIGITAL ASSETS/ CRYPTOCURRENCY U/S 115 BBH

Applicability of TDS & Tax Rate on Virtual Digital assets/ cryptocurrency

• Any Kind of Income received from the transfer of any Virtual Digital Assets/ cryptocurrency will be taxed @ 30%. Slab rate
• 1% tax deducted at source will be deducted on such transfers of Virtual Digital Assets/ cryptocurrency
• The tax on Virtual Digital Assets/ cryptocurrency is not similar U.S.A.—will be separate from taxation levied on capital gains from other investments like investment in funds and/or stocks.

Allowability of Set off and carry forward of losses

• No set-off & carry-forward of losses allowed to virtual digital assets/cryptocurrency investors.

Taxability of Gift of Digital Asset

• Individuals who receive Virtual Digital Assets/ cryptocurrency as gifts would also be taxed U/s 56(2)(x) of income tax act,

Allowability of Expenses to be deducted from Sale Value

• No Deduction (Other than cost of acquisition of Virtual Digital Assets/ cryptocurrency) in respect of any expenses shall be allowed under any provisions of the income tax Act.

The government's objective is to discourage investing in volatile assets rather than outright banning them, as seen by the high tax rate and inability to balance losses against any other sources of income.

Top 20 countries on Global Crypto Adoption Index in 2025

• Crypto adoption in 2025 is led by emerging markets (especially APAC), with growth driven by practical use cases, while developed regions like the US are advancing through institutional and regulatory support.
• APAC leads global crypto adoption, with India, Pakistan, and Vietnam driving widespread usage across both centralized platforms and DeFi. India ranks #1 globally and tops all major categories.
• North America (led by the US) ranks second, fueled by regulatory progress such as approval of spot Bitcoin ETFs and clearer institutional frameworks, boosting participation from traditional finance.
• Top-performing countries include India (#1), US (#2), Pakistan (#3), and Vietnam (#4), with strong representation from emerging markets. APAC is the fastest-growing region, with a 69% increase in crypto activity, and transaction volume rising from $1.4T to $2.36T over one year. Latin America (+63%) and Sub-Saharan Africa (+52%) also show strong growth, driven by Remittances, Inflation protection and Everyday payments.
• There is a clear shift toward the Global South, where crypto adoption is driven by real-world utility rather than speculation. So Crypto adoption in 2025 is being driven less by speculation and more by necessity—led by APAC and the Global South, while the US drives institutional legitimacy.

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