India: Guidance on definition of virtual digital asset subject to new tax regime

Guidance regarding definition of a virtual digital asset for purposes of new tax regime

Guidance regarding definition of a virtual digital asset for purposes of new tax regime

The Central Board of Direct Taxes (CBDT) issued guidance regarding the definition of a virtual digital asset for purposes of the new tax regime for income arising from virtual digital assets introduced by the Finance Act, 2022.

The term virtual digital asset is defined under section 2(47A) of the Act to include the following:

  • Any information or code or number or token (not being Indian currency or foreign currency) which meets certain conditions
  • Non-fungible token (NFT) or any other token of similar nature, by whatever name called
  • Any other digital asset, as the government may specify by notification

The government also may exclude any asset from the definition of virtual digital asset by notification.

The CBDT issued two notifications for the purpose of defining virtual digital asset under section 2(47A) of the Act—one excluding certain assets from the definition, and a second defining NFT for purposes of the section.

Read a July 2022 report [PDF 238 KB] prepared by the KPMG member firm in India

 

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.