India’s Finance Act 2022 has been published in the Official Gazette following its approval on 30 March 2022. The Act implements the measures of the Union Budget 2022-2023 that was delivered in February 2022.
A new scheme is introduced for the taxation of virtual digital assets (VDAs), including:
- income from the transfer of VDAs is separately taxed at the rate of 30%;
- no deduction in respect of any expenditure or allowance is allowed in computing such income except the cost of acquisition, if any;
- losses from the transfer of a virtual digital asset cannot be set off against any other income, including income from another virtual digital asset, and such losses may not be carried forward; and
- tax deducted at source (TDS) is imposed at the rate of 1% on the transfer of virtual digital assets for consideration above a monetary threshold of:
- aggregate annual consideration of INR 50,000 if paid by a specified person, which generally means an individual or a Hindu undivided family whose business income does not exceed INR 1 crore or whose professional income does not exceed INR 50 lakh; and
- aggregate annual consideration of INR 10,000 if paid by a person other than a specified person;
Source Orbitax
