Virtual Digital Assets: Tax Implications And Advertisement Guidelines

Introduction

A Virtual Digital Asset (hereinafter referred to as "VDA") has been defined as any information or code or number or token (not being Indian currency or foreign currency), generated through cryptographic means or otherwise, by whatever name called, providing a digital representation of value exchanged with or without consideration, with the promise or representation of having inherent value, or functions as a store of value or a unit of account including its use in any financial transaction or investment, but not limited to investment scheme, and can be transferred, stored or traded electronically (refer section 3(c) of the Finance Act, 2022 ("2022 Act") and the recently published "Guidelines for Virtual Digital Assets and Linked Services" ("ASCI Guidelines") by the Advertising Standards Council of India ["ASCI"]¹). Such VDAs include "crypto products" and non-fungible tokens (NFTs) (refer our articles in relation to NFTs here² and cryptocurrencies here