Articles 23rd Mar 2022
The Finance Minister of India, Nirmala Sitharaman, during her announcement of India’s Union Budget 2022, introduced specific proposals to tax virtual digital assets (VDAs), including cryptocurrencies. Against this backdrop, Stella Joseph, Partner and Yash K Desai, Associate at Economic Laws Practice (ELP) have co-authored an article titled ‘India’s New Regime for Taxing Virtual Digital Assets’, published by Bloomberg Tax.
In their article, Stella and Yash analyze India’s new regime for taxing virtual digital assets announced in the Union Budget 2022 and set out in the Finance Bill, 2022. The authors further discuss the stance of government on cryptocurrency. India’s Union Budget 2022 proposals have neither legalized cryptocurrencies nor prohibited them. The general position in law remains that it is possible to tax an income even if such income is generated out of a business which is illegal. Thus, the taxation of VDAs per se does not lend legitimacy to its trading, and it will be necessary to wait for the final version of India’s Cryptocurrency Bill to understand the legality of the underlying trade.
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