Finance Minister Nirmala Sitharaman launched the brand new Income Tax Bill, 2025 to the Lok Sabha on February 13. With this new invoice, the finance ministry has offered extra readability to outline what constitutes the sector of ‘digital digital belongings (VDAs)’ within the nation. This transfer follows her presentation of the FY2025-26 finances earlier this month. During her finances speech, the FM didn’t point out any modifications to the tax legal guidelines enforced over the crypto sector, leaving members of the crypto group disenchanted.
Here’s How the New Income Tax Bill, 2025 Defines VDAs
India is among the many many international locations working to realize a deeper understanding of the Web3 business, which encompasses blockchain, cryptocurrencies, and non-fungible tokens (NFTs).
According to the brand new Income Tax Bill — any info, code, quantity, or token that’s generated via cryptographic means and offers any digital illustration of an inherent worth — will probably be seen as a part of the VDA ecosystem within the nation.
For the primary time, NFTs have been explicitly categorised as digital digital belongings (VDAs) in India. These blockchain-based tokens signify distinctive digital or bodily belongings that can’t be replicated. NFT holders have licensed proof of possession, which stays immutable except they select to switch or divide it. While some NFTs function digital collectibles, many maintain monetary worth and may be traded for revenue. In current years, manufacturers and sport publishers have leveraged NFTs in advertising and marketing methods to draw youthful audiences, supply rewards, and drive in-service spending.
“The Central Government may, by notification, exclude any digital asset from this definition,” the bill added.
Commenting on the development, Giottus founder Arjun Vijay told Gadgets 360 that after due diligence, the government may warm up to the VDA sector after all.
“Just like how all transactions for stocks, etc is stored with Income tax and find a mention in the automatic identification system (AIS), soon we will have the same for crypto transactions as well,” Vijay said. “We are happy with every interaction as we get more coupled with the government bodies, and we get an opportunity to prove our commitment.”
Other Crypto-Related Information that Made it to the Bill
The 622-page legislation, comprising 536 clauses, offers guidance on aligning crypto businesses with Indian law. It clarifies that funds generated through virtual digital assets (VDAs) are classified as “undisclosed earnings.”
On Page 492, the invoice outlines the duty to report crypto transactions. It mandates that any entity coping with cryptocurrencies should submit transaction particulars to the earnings tax authority. However, the invoice doesn’t specify the format, method, or timeframe for submission.
If errors are present in submitted particulars, companies could have 30 days to appropriate them. Failure to take action throughout the given interval will probably be thought of as furnishing inaccurate info. Companies may additionally proactively report errors to the tax authorities. Non-compliance with reporting necessities may result in motion from tax officers.
The Income Tax Bill 2025 is about to switch the Income Tax Act of 1961, aiming to simplify the tax submitting course of. However, the Finance Ministry has not launched any modifications to the present 30 p.c tax on crypto earnings.
India’s crypto and Web3 group continues to await supportive coverage amendments whereas recognising the complexities of assessing VDA-related dangers in a rustic of India’s scale. However, they continue to be hopeful that, over time, authorities will take steps to foster the expansion of the Web3 sector.
“Speed always does not equate to sustainability. With so many stakeholders involved, Government agencies, financial institutions and regulators public policy making will take time to ensure it is comprehensive and inclusive,” Utkarsh Tiwari, Chief Strategy Officer , KoinBX crypto change informed Gadgets 360.
