India: Guidance on definition of virtual digital asset subject to new tax regime

Guidance regarding definition of a virtual digital asset for purposes of new tax regime

Guidance regarding definition of a virtual digital asset for purposes of new tax regime

The Central Board of Direct Taxes (CBDT) issued guidance regarding the definition of a virtual digital asset for purposes of the new tax regime for income arising from virtual digital assets introduced by the Finance Act, 2022.

The term virtual digital asset is defined under section 2(47A) of the Act to include the following:

  • Any information or code or number or token (not being Indian currency or foreign currency) which meets certain conditions
  • Non-fungible token (NFT) or any other token of similar nature, by whatever name called
  • Any other digital asset, as the government may specify by notification

The government also may exclude any asset from the definition of virtual digital asset by notification.

The CBDT issued two notifications for the purpose of defining virtual digital asset under section 2(47A) of the Act—one excluding certain assets from the definition, and a second defining NFT for purposes of the section.

Read a July 2022 report [PDF 238 KB] prepared by the KPMG member firm in India

 

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