Finally, income from cryptocurrency to be taxed at 30%

In a major announcement, the finance minister Nirmala Sitharaman said in her Budget speech that income from virtual digital assets will be taxed at 30%.

Also, to bring such assets under the tax net, she proposed a 1 per cent TDS (tax deducted at source) on transactions in such asset classes above a certain threshold.

She also added that any loss from virtual digital assets can't be set off against other gains.


The FM said that gifts of virtual digital assets will also be taxed in hands of the recipient.

The Budget was expected to bring some clarity on cryptocurrency transactions and their tax treatment.

A crypto taxation framework will bring clarity and boost investments in cryptocurrency.

Crypto transactions have seen an exponential rise in the last one year amid discussions over whether to ban them completely or allow them in some form.

The tax proposals will come into effect from April 1 after the passage of the Union Budget in Parliament.

Meeting demands from large sections of industry, she said the RBI will launch a 'Digital Rupee' based on blockchain technology in 2022-23.

Experts said the 30 per cent tax levied on income arising from the sale of cryptocurrency is similar to the tax rate on winnings from lottery, game shows, puzzles etc.

Digital currency and assets like NFTs (non-fungible tokens) have gained traction globally over the last couple of years. Trading in these assets has increased manifold with cryptocurrency exchanges being launched. However, India did not have a clear policy on either regulating or taxing such asset classes.

(With inputs from PTI)