India

Individual - Significant developments

Last reviewed - 07 June 2022

Virtual Digital Assets (VDA)

Effective 1 April 2022, any income from transfer of VDA is taxable at the rate of 30% (plus surcharge and cess). VDA has been defined as, inter-alia, any information, code, number or token not being Indian currency or foreign currency.

No deduction is available in respect of any expenditure or allowance (other than the cost of acquisition) will be available. Loss from transfer of VDAs is neither eligible to be set off against any income nor permitted to be for carried forward.

An obligation to withhold taxes at the rate of 1% on payment (in cash or kind) to a resident on the transfer of VDAs has also been provided.

Upon gift of VDAs, the taxability would arise in the hands of the recipient. See India's individual tax summary for details.

Updated tax returns

Every person is required to file tax return within due date as prescribed. Further, revision in the tax return can also be done, but before 31 December of the year immediately after the relevant tax year or completion of audit proceedings, whichever is earlier.

The taxpayers have now been enabled to file an updated tax return within 36 months from the end of the relevant tax year, irrespective of the filing status of the tax return i.e., original or amended. For filing the updated tax return, the taxpayers would be required to pay additional tax over and above the regular taxes & interest as applicable; additional tax payable shall be 25% or 50% of aggregate of tax and interest payable, depending on the time when the updated tax return is filed.

An updated tax return cannot be filed in a few circumstances, inter-alia, if it is a loss tax return or has an effect of decreasing the tax liability or increasing the tax refund vis-à-vis the return already filed for the relevant tax year.

The updated tax return shall be treated as defective if it is not accompanied with the proof of payment of additional taxes, interest and fee.