Union Finance Minister Nirmala Sitharaman proposed a 30 per cent tax on income from virtual digital assets in her Budget 2022-23 speech on February 1.
- She also announced that no deduction in respect of any expenditure or allowance shall be allowed while computing such income except the cost of acquisition.
- The Finance Minister proposed a TDS on payment made in relation to the transfer of virtual digital assets at 1 per cent above a monetary threshold.
- She further clarified that if a virtual digital asset investor incurs losses during the transaction, it can’t be set off against any other income.
- The gifting of virtual digital assets has also been proposed to be taxed in the hands of the recipient.
- To define the term “virtual digital asset”, a new clause (47A) is proposed to be inserted to section 2 of the Act.
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