'Crypto Tax' has been the buzzword following the
unveiling of India's Union Budget (Finance Bill) for 2022!
While a Government bill proposing to ban and criminalise the
investment and trading of cryptocurrencies has been in the pipeline
since 2019, the Finance Bill has introduced, in an unexpected move,
a capital gains tax on the transfer (by way of sale, exchange, or
gift) of ‘virtual digital assets' such as
cryptocurrencies and non-fungible tokens (NFT).
Introduction to Cryptocurrencies, Non-Fungible Tokens
Both cryptocurrencies and NFTs are based on blockchain or other
distributed ledger technologies. Oversimplified, blockchain is a
manner of storage of data in a decentralised manner such that no
one person (or group) can exercise absolute control over the data.
The term ‘blockchain' refers to the manner in which new
packets of data (called blocks) when added are linked to the last
added block of data, thus forming a chain of data blocks linked
chronologically.
