India: Introduced Finance Bill 2022 including expansion of income tax to virtual digital assets

On 1 February 2022, the Finance Bill 2022, which includes an expansion of income tax to include virtual digital assets, was introduced in the Lok Sabha, the lower house of the Indian Parliament. Under the Bill, virtual digital assets are defined to include cryptocurrencies and non-fungible tokens. The Bill would subject income from trading virtual digital assets to an income tax of 30%. Further, trading losses cannot be set off against income from other sources. If passed, the provision would come into effect on 1 April 2022. Further, the Bill would introduce a one-percent tax-deducted-at-source on all transactions involving virtual digital assets. This provision would come into effect on 1 July 2022.