Taxation Of Digital Assets In India: Normal Vs VDA Regime And Comparative Global Alignment
- IJLLR Journal
- Sep 24
- 1 min read
Utkarsh Utsav, Chanakya National Law University, Patna
Sakshi Upadhyay, Chanakya National Law University, Patna
ABSTRACT
This article critically examines India’s dual approach towards taxing the virtual digital assets- namely the traditional capital gains and business income framework (the ‘normal regime’) versus the new Virtual Digital Assets (VDA) regime introduced under the Finance Act, 2022. The article also gives a brief description of what are Virtual Digital Assets under the Indian law and clarifies which digital instruments fall outside this classification. The article progressively, then outlines the key features of the VDA regime including the flat 30% tax rate on gains, disallowance of deductions, and denial of loss set-offs, and these are then compared against the more flexible provisions of the Income Tax Act, 1961 (‘Normal Regime’). The analysis further explores the constitutional and economic ramifications of this new framework and evaluates India’s approach in light of global practices in jurisdictions such as the United States, United Kingdom, Germany, and Singapore.
Keywords: Digital Assets, Cryptocurrency, Virtual Digital Assets, Income Tax Act, Section 115BBH, Global Taxation, Capital Gains, Blockchain, OECD
