India’s Ministry of Finance Provides Update on Crypto Taxation
The Indian ministry of finance on Monday clarified how the government intends to tax cryptocurrency transactions in the country. Answering questions in the lower house of parliament, Lok Sabha, minister Pankaj Chaudhary, the minister of state in the ministry of finance, explained that The Financial Bill 2022 has proposed to insert section 115BBH to the Income Tax Act 1961 to provide for the taxation of income from transfers of virtual digital assets (VDAs).
The minister said:
“As per the proposed section, any income from transfer of VDA shall be taxed at the rate of 30%.
Further, while computing the income from transfer of VDA, no deduction in respect of any expenditure (other than cost of acquisition) or allowance is allowed.”
Chaudhary added:
“The bill also proposes to define VDA. If any asset falls within the proposed definition, such virtual asset will be considered as VDA for the purposes of the Act and other provisions of the Act will apply accordingly.”
He further clarified how infrastructure costs in mining are deductible, stating:
“Infrastructure costs incurred in mining of VDA (eg. crypto assets) will not be treated as cost of acquisition as the same will be in the nature of capital expenditure which is not allowed as deduction as per the provisions of the act.”
India’s cryptocurrency legislation is still being delayed after it was supposed to be up in the winter session of parliament. The government needs more time, reportedly until November this year.
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Source: igaming
