Guidelines issued by CBDT around cryptocurrency taxation

Forum invites inputs on issues emanating from recent guidelines issued by CBDT around cryptocurrency taxation

June 30, 2022

The Union Budget 2022 introduced a tax incident for virtual digital assets (VDA), bringing cryptocurrency transactions into the ambit of direct taxes. CBDT has now issued multiple clarifications recently to address ambiguities that may emerge from the applicability of TDS on VDAs:

  • Guidelines dated June 22, 2022 in Q&A form clarifying aspects such as person responsible for TDS compliances under Section 194S in different scenarios, valuation of consideration, etc. (summary of these guidelines can be accessed on our website here)
  • Guidelines dated June 28, 2022, to clarify aspects in relation to cryptocurrency transactions not routed through an Exchange
  • Notification No. 73/2022 dated June 30, 2022 to notify quarterly TDS statement in Form No. 26QF to be filed by cryptocurrency Exchange where the Exchange has entered into an agreement to undertake TDS compliances in lieu of the buyer
  • Notification No. 74/2022 dated June 30, 2022, to clarify that certain items (such as gift cards, vouchers, mileage/ reward points, website/platform subscriptions) shall be excluded from the scope of VDAs
  • Notification No. 75/2022 dated June 30, 2022, to clarify that NFTs whose transfer results in transfer of ownership of underlying tangible asset, shall be excluded from the scope of VDAs.

As part of our post-Budget engagements, the Forum had shared concerns emerging from the wide definition of VDAs and the applicability of Crypto Tax. In continuation of our efforts, the Forum would like to invite broader feedback from the industry with respect to the aforementioned clarifications/guidelines issued by CBDT.