scorecardresearchBudget 2022: Income from transfer of crypto, NFTs to be taxed at 30 percent

Budget 2022: Income from transfer of crypto, NFTs to be taxed at 30 percent

Updated: 01 Feb 2022, 01:19 PM IST
TL;DR.

The income made on the sale of digital assets to be taxed at a flat rate after deducting the cost of acquisition, announced the FM

No exemptions or deductions will be allowed on the profit made on the transfer of digital assets.

No exemptions or deductions will be allowed on the profit made on the transfer of digital assets.

The transfer of digital assets, like cryptocurrencies and Non-Fungible Tokens (NFTs), will be levied at the rate of 30 percent, announced Union Finance Minister Nirmala Sitharaman during the Union Budget 2022 speech.

While expressing the government’s intent to tax the profits made on digital assets, the FM said, “There has been phenomenal increase in transaction of digital assets. The magnitude has made it imperative to provide for a specific tax regime. Accordingly, for the taxation of virtual digital assets, I propose that any income from the transfer of any virtual digital asset shall be taxed at the rate of 30 percent.”

To explain it further, she made it clear that no exemptions or deductions will be allowed on the profit.

Finance Minister also announced setting up of India's own cryptocurrency - Digital Rupee.

“No deduction in respect of any expenditure or allowance will be allowed except cost of acquisition,” she added further. 

Another provision that might not go down well with the investors of digital assets is that the losses incurred on these assets can not be adjusted against profits made under other heads. 

“Loss from the transfer of digital assets cannot be set off against any other income,” clarified the FM. 

The gift of digital assets will be taxed in the hands of the recipient.

 

First Published: 01 Feb 2022, 01:10 PM IST