The Central Board of Direct Taxes of India has declared that the digital assets received in loyalty points or gift cards can be excluded from the VDA taxation scope. Despite this positive news amidst TDS-imposed tensions, ETH and BTC have formed new lows in the crypto market by 5% and 6%, respectively.
CBDT brought about positive information in the ambit of taxation by excluding not only gift cards and loyalty points but also mileage points, reward points, subscriptions to websites and applications, or incentive programs from the milieu of VDA (Virtual Digital Asset).
According to the Income Tax Act of 1961, a virtual digital asset was defined as any form of code, information, token, or number using the medium of cryptography. But the Indian currency or any other foreign currency wasn’t classified under the VDA category.
As per CBDT Notification No. 74/2022 dated June 30, 2022, the following were excluded from the definition of Virtual Digital Asset (“VDA”) under the Income Tax Act, 1961.@IncomeTaxIndia#incometax #incometaxindia #cbdt #cashubhamjain pic.twitter.com/ik8uxPA58x
— CA Shubham Jain (@CAshubhamjain_) July 2, 2022
What effect did the news have on the cryptocurrency market?
In spite of a positive step taken by CBDT towards cryptocurrency taxation, the global market cap has performed poorly and is down by 4.16% to 863.55 billion dollars. As per the data from experts in the crypto market, the global cryptocurrency market volume was at its lowest, i.e., down by 11.68% to 63.61 billion dollars.
In the last 24 hours, the world’s oldest cryptocurrency—BTC, was traded at $19,177.27, which is lower by almost 6%, while ETH was traded at $1043.95, at an overall low of 4.59%.
Several other altcoins have suffered, too, including ADA (Cardano), ALGO (Algorand), SOL (Solana), DOT (Polkadot), BNB (Binance Coin), and more. The highest performer in the crypto market was MVP (MetaversePay), which showed an increase in value of more than 1070.82%.