Virtual Digital Assets (VDAs)

 For the first time in India, the Income Tax Bill, 2025, explicitly treats Virtual Digital Assets (VDAs) as property and capital assets.

• This classification enables taxation, regulation & seizure of crypto assets to prevent illicit financial activities.
• Aligns India's tax structure with global practices followed by the U.K., U.S., Singapore, Australia, New Zealand & UAE.
• About Virtual Digital Assets (VDAs): As per Section 2(111) of the Income Tax Bill, 2025, VDAs include crypto assets, Non-Fungible Tokens (NFTs), and similar digital assets.
• VDAs as Property: Classified as property (Section 92 (5) (f)) and capital assets (Section 76(1)), impacting taxation, compliance, and legal recognition.
• Taxation of VDAs:

o Capital Gains Tax: Any gains from sale, transfer, or exchange of VDAs will be taxed under capital gains provisions, similar to real estate, stocks, and bonds.

o Flat 30% Tax: Income from VDA transfers is taxed at 30%, with no deductions allowed (except for the cost of acquisition).

o Example: Buying Bitcoin at ₹10 lakh and selling at ₹20 lakh incurs a ₹10 lakh profit, taxed at 30%.