Virtual digital assets may get a broader definition

economictimes.indiatimes.com:

New Delhi: India could widen the definition of virtual digital assets to cover any new such assets that may emerge and also further refine the provision to tax these assets. The budget for FY23 announced last week proposes to tax any income from the transfer of any virtual digital asset at a flat 30% rate. The provision will be applicable from April 1, 2022. The government could fine-tune the provisions proposed in the budget to tax virtual digital assets after discussions with the industry and to account for the dynamic nature of the sector, officials told ET.

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“We want to ensure that the definition is dynamic enough to cover any new product that comes by due to technological changes…This sector is witnessing new products in a short time,” a senior government official told ET. The government would also provide for a specific provision for any removal of difficulty in implementation of the budget provision that may arise, the official.Multiple concerns Experts have pointed out that peer-to-peer (P2P) or wallet-to-wallet transactions may escape this tax. There are also concerns among some sections of policymakers that the proposed tax regime may provide a window for laundering black money via the provision for tax on gifted crypto assets, people privy to the deliberations said. They also fear misuse of the route through the use of technology. Tax officials, however, said while the income tax department would collect tax, other agencies could question the recipient on the source of the