Crypto Taxation In India: Overregulation Or Growth?
- IJLLR Journal
- Apr 13
- 1 min read
Sneha Gupta, Manav Rachna University
ABSTRACT
India’s evolving approach to taxing cryptocurrencies is examined in this article, as well as whether the current framework is barrier to innovation or an opportunity for economic growth. The article starts off by introducing cryptocurrency as a decentralized digital asset driven by blockchain technology, and emphasizing how Indian investors are becoming more and more interested in it. The article then examines the legal acceptance of cryptocurrencies as “Virtual Digital Assets” or VDAs under the Income Tax Act, 1961 through the Finance Act, 2022, and considers key provisions including the statutory rate of 30% on earnings under section 115BBH and the statutory tax reduction of 1%. Despite enhancing legal clarity, these initiatives highlight key difficulties such as high taxation, liquidity limits owing to TDS, lack of loss adjustment, and the absence of a uniform supervisor, each of these discourage participants and drive their activity to unregulated platforms. A dedicated authority, rationalized taxation, and loss set-off are among the reforms suggested in the article. According to these findings, cryptocurrencies’ full potential in India’s digital economy requires a more balanced, investor-friendly framework.
Keywords: Cryptocurrency, Virtual Digital Assets (VDAs), Crypto Taxation, India, Blockchain Regulation.
