Setback for crypto traders, transfer of virtual digital assets to be taxed at 30%

New Delhi: Presenting her 4th Union Budget on Tuesday, Finance Minister Nirmala Sitharaman dropped a bombshell on crypto traders as she announced that transfer of virtual digital assets will be taxed.

Any income generated from the transfer of any virtual digital asset will now be taxed at the rate of 30 per cent. The gifting of such virtual digital assets will be taxed in the hands of the recipient. FM added, “No deduction in respect of any expenditure or allowance shall be allowed while computing such income, except cost of acquisition.”

On FM’s announcement on crypto tax, Tapati Ghose, Partner, Deloitte India said, “No deduction other than cost of acquisition will be allowed. Transaction details to be captured by way of TDS on sale. Gift of VDA to be taxed in the hands of the recipient.”

In her Budget speech, Sitharaman also informed that the Reserve Bank of India will launch a digital currency by 2023. The introduction of central bank digital currency will boost the digital economy and also lead to a cheaper currency management system.