The Centre said offerings like online gift cards and coupons won’t be counted as virtual digital assets, dispelling concerns that they face the same steep taxation as cryptocurrencies.
The government in February announced plans to tax any income from cryptocurrency assets at a flat 30 per cent rate. It defined virtual digital assets vaguely at the time, leading to confusion about whether items like online gaming coupons, website subscriptions and reward points would also be taxed, said Amit Maheshwari, managing partner at Ashok Maheshwary & Associates.
“With this clarification now, this ambiguity has been addressed and they do not have to bear the tax burden of 30 per cent which will also create certainty in this space,” Maheshwari adds.
The government has also clarified that tangible asset-backed non-fungible tokens will be excluded from the definition of VDAs.