Definition
Virtual Digital Asset (VDA)
Virtual Digital Asset is the term Indian tax law uses for cryptocurrencies, NFTs and similar tokens, bringing them under a specific, stringent tax regime. This is informational, not investment advice.
Under Indian income tax law, a VDA broadly covers cryptocurrencies, non-fungible tokens (NFTs) and other notified digital tokens generated cryptographically. The classification matters because VDAs are taxed under a special, harsh framework rather than as ordinary capital assets.
Gains from transferring VDAs are taxed at a flat 30% rate (plus applicable surcharge and cess), with no deduction allowed except the cost of acquisition, and losses from one VDA cannot be set off against gains from another or carried forward. A 1% TDS applies on transfers above thresholds.
VDAs are high-risk and highly volatile, are not legal tender in India, and this entry is purely informational, not investment advice. Treat any exposure as speculative and understand the tax and risk implications first.
Related terms
- 30% Crypto Tax (India)India taxes income from transferring virtual digital assets at a flat 30% rate, with no deductions other than cost of acquisition and no set-off of losses. This is informational, not advice.
- 1% TDS on CryptoIndia levies a 1% tax deducted at source on the transfer of virtual digital assets above specified thresholds, creating an audit trail of crypto transactions. This is informational, not advice.
- CryptocurrencyA cryptocurrency is a digital asset that uses cryptography and a blockchain to record transactions without a central authority; in India it is a taxed VDA, not legal tender. This is informational, not advice.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.