Vide Indian Union Budget of 2022 a new tax regime has
been introduced for taxing Virtual Digital Assets ("VDA")
in India with effect 1st April 2022. A concomitant
provision under Section 194S of the Income-tax Act, 1961 ("the
Act') as regards Tax Deduction at Source ("TDS") has
now become effective from 1st July 2022. Since the
introduction of this new tax regime, the Indian crypto market has
witnessed a sharp decline, which is also attributable to the global
trends in relation to crypto trade. From the perspective of the new
tax regime in India, the biggest concern is the high rate of tax of
30%. Further, an equally concerning aspect has been the modalities
in which the TDS provisions would be effectuated.
