The Finance Bill 2022 proposes to cover Crypto assets as 'Virtual Digital Assets' for Income Tax purpose

Submitted by dhananjay on Wed, 02/02/2022 - 11:37

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New Delhi: The Finance Bill 2022 from Finance Minister Nirmala Seetharaman has proposed to introduce a slew of new provisions in the Income-Tax Act, 1961 to provide for a framework for taxation of income on sale and purchase of Virtual Digital Assets. 

It is proposed to insert a new clause (47A) to the Section 2 of Income-Tax Act, 1961 to define the expression “virtual digital asset” to mean, ––
"(a) any information or code or number or token (not being Indian currency or any foreign currency), generated through cryptographic means or otherwise, by whatever name called, providing a digital representation of value exchanged with or without consideration, with the promise or representation of having inherent value, or functions as a store of value or a unit of account including its use in any financial transaction or investment, but not limited to investment scheme and can be transferred, stored or traded electronically;
(b) a non-fungible token or any other token of similar nature by whatever name called;
(c) any other digital asset as may be notified by the Central Government in the Official Gazette in this behalf, It is further proposed to provide that the Central Government may, by notification in the Official Gazette, exclude any digital asset from the definition of virtual digital asset subject to such conditions as may be specified therein.
It is also proposed to define certain expressions for the purposes of the said clause. 
These amendments will take effect from 1st April, 2022."