Finance Minister Nirmala Sitharaman in her budget speech on Tuesday announced the imposition of 30% tax and 1% TDS on profits from transactions of virtual digital assets.

30% tax on digital currency, RBI to launch Digital Rupee based on blockchain technology

The Finance Minister has said that this year CBDC (Central Bank Digital Currency) will be introduced which will be managed by RBI and RBI will use Blockchain technology for this.

Along with this, the Finance Minister has also clarified that a 30% capital gain tax will be levied on the income from virtual digital assets and you cannot set off the loss from next year’s profit.

And if you gift these virtual digital assets to someone, then the recipient will have to pay tax.

Recently the Government of India (GOI) made some announcements giving further clarification on the tax on VDA.

The loss on one digital asset cannot be offset with the gain on another digital asset.

For example, if you make a profit of Rs 1000 on Bitcoin and a loss of Rs 1000 on Ethereum, then you will not be able to set off your profit on Bitcoin with the loss of Ethereum. You will have to pay 30% tax on a profit of Rs 100 on Bitcoin.

The electricity and computing power involved in crypto mining will not be counted in the cost of acquisition and hence no deduction will be given on them.

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