5.Reward points, e-vouchers out of the scope of crypto tax

To provide more clarity on the rules for taxing crypto currencies, the Centre is reportedly planning to exclude digital reward assets such as e-vouchers, reward points issued by shopping sites or credit card companies, and so on from the proposed tax on virtual digital assets (VDAs).

On February 1, Finance Minister Nirmala Sitharaman announced in the Budget 2022-23 that any income from the transfer of any virtual digital asset would be taxed at a rate of 30%, with a 1% tax deducted at source (TDS) on transactions in such asset classes above a certain threshold.

According to Sudhir Kapadia, National Tax Leader “Because the current definition of ‘Virtual Digital Assets’ is so broad, it is critical for the Central Board of Direct Taxation (CBDT) to clarify some obvious exclusion such as credit card reward points, airline miles, gift vouchers, online mutual fund transactions, and so on”.

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