1% Tax (TDS) On Digital Assets Transactions From Today; These Excluded

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1% TDS on Virtual Digital Assets from today, but some items are exempt, read

A 1 per cent Tax Deducted at Source (TDS) on virtual digital assets' (VDAs) transactions comes into play from today, July 1, 2022, and a 30 per cent rate on income from activities on such assets, but a government notification has clarified that some items will not be considered as digital assets.

All virtual digital assets (VDAs) transactions, including those involving cryptocurrencies and non-fungible tokens (NFTs), worth more than Rs 10,000 will be subject to the TDS deduction. 

In clause 47 A added to the Income Tax Act, "VDA" is defined as any information, code, number, or token formed using cryptography or other techniques and excluded Indian or any other foreign currency. Non-fungible tokens and any others that fit the same description are included.

But the Central Board of Direct Taxes (CBDT) said in a notification that certain digital items would be excluded from the definition of virtual digital assets (VDAs).

The CBDT notification said, "the Central Government hereby notifies following virtual digital assets which shall be excluded from the definition of a virtual digital asset. (i) gift card or vouchers, being a record that may be used to obtain goods or services or a discount on goods or services; (ii) Mileage points, reward points or loyalty card, being a record given without direct monetary consideration under an award, reward, benefit, loyalty, incentive, rebate or promotional program that may be used or redeemed only to obtain goods or services or a discount on goods or services; (iii) Subscription to websites or platforms or application."

That notification came into effect yesterday, June 30, 2022. It will ensure that those items