Government clears air on the taxation of Digital Assets, including Cryptos

The minister of State for Finance Pankaj Chaudhary was asked a question on the taxation of Digital Assets including Crypto Currencies. As a response to this question, today Union finance minister Nirmala Sitharaman will move an amendment to make it clear that no tax deduction or set-off would be available in lieu of mining costs of cryptocurrencies and other virtual digital assets (VDAs) or losses from their transfer.

The Finance Bill is scheduled to be taken up in the Lok Sabha for discussion on Thursday, and most probably the discussion will begin tomorrow, that is on Friday. The government has decided to incorporate around 39 changes to the Finance Bill. If anything, the ordinances will tighten the regulations on taxation even further.

The government will also move an amendment that explicitly states that “All transfers of virtual digital assets will be covered under the proposed 30% tax irrespective of whether they were a capital asset or not.” From April 1, the income tax of 30% is to be levied on Crypto Assets, as per the Union Budget 2022-23.