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However, the compliance burden related to transaction in virtual assets has been tightened. The Budget states, “It is proposed to bring amendment in the Act to provide for that a prescribed reporting entity in respect of a crypto asset shall furnish information in respect of a transaction in such crypto asset, in a statement as prescribed. It is also proposed to align the definition of virtual digital asset accordingly.”
In other words, the government has proposed an amendment to the Income Tax Act, requiring designated reporting entities to disclose transaction details of virtual digital assets (VDAs).
What does this mean?
The government has maintained the 30% tax on crypto income and the 1% TDS on crypto transactions, both introduced in July 2022. Additionally, it has not extended the Securities Transaction Tax (STT) to crypto futures and options (F&O), keeping taxation unchanged.
While cryptocurrencies remain unregulated in India, the introduction of a separate section for Virtual Digital Assets (VDAs) in ITR forms for FY 2023-24 highlighted the government’s intent to track crypto transactions. However, uncertainty persists regarding the treatment of crypto F&O, which is currently taxed as business income, unlike regular VDAs taxed as speculative income.
Industry experts were expecting a revision in the high tax rates and greater regulatory clarity to align with global frameworks. The sector had also sought recognition of cryptocurrencies as a formal asset class and policy support for blockchain-based startups. However, Budget 2025 did not address these concerns, leaving investors and industry players disappointed.
Also Read: Budget 2025: Here’s a look at big income tax numbers from today’s announcement
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