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.

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