Taxmann Taxation of Virtual Digital Assets Edition April 2022

Taxmann Taxation of Virtual Digital Assets Edition April 2022

Taxmann Taxation of Virtual Digital Assets Edition April 2022

This one-of-a-kind book provides a complete analysis (from an Income-tax & GST perspective) of the new scheme of taxation of Virtual Digital Assets (VDAs), which includes Cryptocurrencies and Non-fungible Tokens (NFTs).

This book helps the reader to understand the following:

• Basic Concepts & Ecosystem of VDAs
• Difference between the New & the Old Scheme of taxation of VDAs
• GST Implications on VDAs
• Current Tax Challenges

This book also explains the essential taxonomy of the following:

• Crypto Assets
• NFTs
• Blockchain Technology
• Distributed Ledger Technology
• Airdrop
• Mining, etc.

The Present Publication is the First Edition, authored by Taxmann’s Editorial Board. This book is amended by the Finance Act 2022 and addresses the following critical issues w.r.t. to VDAs:

• All foreign currencies have been kept out of the meaning of VDA. Why Bitcoin is a VDA even if El Salvador has adopted Bitcoin as its official currency?
• How to determine the situs of VDA for taxability in the hands of a non-resident?
• Head in which the income from transfer of VDA should be taxed?
• How should the income from the lending of cryptocurrencies be taxed?
• Whether mining of cryptocurrencies is a taxable event?
• How to determine the cost of acquisition of mined cryptocurrencies?
• Tax implications if VDAs are lost or stolen
• How to determine the fair market value of VDAs?
• Whether Section 87A rebate and maximum exemption limit allowed from income from VDAs?
• Treatment of losses incurred from transfer of VDAs on or before 31-03-2022
• How to compute the income from the transfer of VDA before 01-04-2022?
• How to compute the TDS under Section 194S in case of an exchange of one VDA for another VDA?
• Whether VDA is money, legal tender, or security?
• Whether VDA is a good or service?
• Whether services by foreign crypto exchanges are OIDAR services?

The detailed contents of the book are as follows:

• Concept of Virtual Digital Asset
• Meaning of Virtual Digital Asset
• Scheme of Taxation of Virtual Digital Asset on or after 1-4-2022
• Transfer of Virtual Digital Asset without or for inadequate consideration on or after 1-4-2022
• Deduction of tax at source under Section 194S
• Scheme of taxation of Virtual Digital Asset before 1-4-2022
• Taxability of cryptocurrency under the GST law

About the author

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of Chartered Accountants, Company Secretaries and Lawyers. This team works under the guidance and supervision of Editor-In-Chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

• The statutory material is obtained only from the authorised and reliable sources
• All the latest developments in the judicial and legislative fields are covered
• Analytical write-ups should be provided on recent, controversial and important issues to help the readers to understand the concept and its implications
• It must be ensured that every content published by Taxmann is complete, accurate and lucid
• All evidence-based statements must be supported with proper reference to Section, Circular No., Notification No. or citations
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• Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied