30% TDS on Cryptoassets and NFTs proposed in Income Tax Bill 2025
The Government has suggested increasing oversight over the transfer of cryptoassets by introducing real-time tax deduction at source (TDS) mechanisms
Union Finance Minister Nirmala Sitharaman tabled the Income Tax Bill 2025 in the Lok Sabha yesterday, 13 February, 2025. The proposed Bill stays in consonance with the existing Income Tax Act, 1961, continuing to impose a 30% tax on gains from cryptoassets and non-fungible tokens (NFTs).
Cryptoassets have been on a steady rise in India, with an increased number of people indulging in the shift from traditional physical investments to digital assets. Section 115BBH of the Income Tax Act, 1961 mandated a flat tax rate of 30% on the transfer of Virtual Digital Assets (VDAs), including cryptocurrency with no provision to offset losses arising from such transfer.
Read More: List of Sections in the New proposed Income Tax Act, 2025
The governmental regulation and administration on VDAs have been raised multifold, with Clause 509(1) of the proposed Income Tax Bill, 2025 calling on exchanges to mandatorily report crypto-transactions within prescribed timeframes, failing which may attract penalties and penal liabilities.
Want a deeper insight into the Income Tax Bill, 2025? Click here
Furthermore, the proposed Bill also calls for Deduction of Tax at Source (TDS) for transactions that exceed a certain threshold limit. The changes calling for increased scrutiny shall ensure that tax compliance is fulfilled at the point of transaction.
Read More: FM Nirmala Sitharaman tables New Income Tax Bill in Parliament
While the definition of crypto assets have been blurry at large, the new Income Tax Bill 2025 is in line with the changing world and has inculcated the definition of cryptoassets and NFTs under the umbrella of “Virtual Digital Assets” under Clause 2(111)(d), treating them as taxable digital properties rather than traditional financial instruments.
While the process of liberating the economy is underway through multifarious steps, the Government still holds the reins tight on the crypto-framework. Losses from crypto trading still cannot be carried forward to subsequent financial years, discouraging speculative trading practices. Additionally, there are no indexation benefits or concessions on long-term holding of cryptoassets, reaffirming the government’s view of crypto as a high-risk investment.
Read More: Income Tax Bill 2025: Proposed Changes in Salary, Pension, and Gratuity Deductions
India’s rapidly growing presence in the digital asset sector is a sign for investors and crypto platforms to adapt themselves to the evolving tax expanse in light of the refined Income Tax Bill, 2025 which is expected to come into force next year.
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