Implications of Treating Virtual Digital Assets (VDAs) as Taxable Properties

Sub: eco

Sec : Fiscal policy

Why in News?

The Income Tax Bill, 2025 has classified Virtual Digital Assets (VDAs) (including cryptocurrencies and NFTs) as property and capital assets, subject to taxation, regulation, and seizure of crypto assets, preventing their misuse in illicit financial activities.
India aligns its approach with global standards followed by other countries such as U.K., U.S., Australia, New Zealand, Singapore, and UAE.
The bill imposes a flat 30% tax on VDA transfers, along with 1% TDS on transactions and mandatory reporting to enhance financial transparency and prevent misuse.

What are Virtual Digital Assets (VDAs)?

VDAs refer to digitally represented assets that leverage blockchain or cryptographic technology for transactions.
VDAs are defined under Section 2(111) of the Income Tax Bill, 2025, VDAs include Cryptocurrencies, Non-Fungible Tokens (NFTs), Stable Coins, Tokenised Assets.

Why is India Taxing VDAs?

Revenue Generation: India’s crypto market sees high trading volumes, providing a new tax revenue stream for the government.
Preventing Tax Evasion: Unreported crypto gains can lead to black money accumulation and illicit transactions.
Reducing Financial Fraud & Risks: Unregulated crypto trading may result in Ponzi schemes, fraud, and investor losses.