{"id":80006,"date":"2026-07-24T18:42:35","date_gmt":"2026-07-24T13:12:35","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=80006"},"modified":"2026-07-24T18:42:54","modified_gmt":"2026-07-24T13:12:54","slug":"virtual-digital-assets-regulation","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/24-07-2026\/virtual-digital-assets-regulation","title":{"rendered":"Need a Regulatory Framework for Virtual Digital Assets"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/Economy<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Parliamentary Standing Committee on Finance, in its report on the <strong>Securities Market Code (SMC),<\/strong> has called for <strong>an \u201cappropriate regulatory framework\u201d<\/strong> for <strong>Virtual Digital Assets (VDAs) such as cryptocurrencies.<\/strong><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Key Recommendations<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The committee noted that <strong>VDAs and crypto-assets were presently unregulated in India,<\/strong> except for the <strong>limited purpose of taxation.<\/strong><\/li>\n\n\n\n<li>It recommended introducing an <strong>interim regulatory mechanism <\/strong>through recognised<strong> Self-Regulatory Organisations (SROs) <\/strong>operating under the <strong>oversight of the designated regulator.\u00a0<\/strong>\n<ul class=\"wp-block-list\">\n<li>Such a framework should prescribe <strong>minimum standards of governance,<\/strong> transparency, disclosure, investor protection, grievance redressal, compliance with<strong> prescribed codes of conduct and appropriate regulatory oversight.<\/strong><\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>It pushed for <strong>specific definitions for VDAs under securities and derivatives and other categories <\/strong>as not all crypto assets qualify under particular segments.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Digital and Virtual Digital Assets<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>The term \u2018Asset\u2019<\/strong> is a resource having<strong> economic value<\/strong> and the same may be <strong>owned by an individual, entity, or country.\u00a0<\/strong>\n<ul class=\"wp-block-list\">\n<li><strong>Assets are classified based on: <\/strong>convertibility, physical existence, and usage.\u00a0<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>A \u2018digital asset\u2019<\/strong> should be a digital file owned by an individual or company, be of value (economic benefit) to the individual or company, and be searchable, discoverable, and available for use.<\/li>\n\n\n\n<li><strong>Virtual Digital Assets (VDA) <\/strong>are <strong>subsets of all digital assets<\/strong> transacted on a blockchain, such as non-fungible tokens (NFTs), cryptocurrencies and other virtual assets.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Taxation of VDAs<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>In India, the term VDA is legally defined <strong>under Section 2(47A) of the Income Tax Act, 1961 (inserted by the Finance Act, 2022).<\/strong><\/li>\n\n\n\n<li>The Union Budget for 2022-23 included<strong> provision for taxation of VDAs.<\/strong> It included <strong>cryptocurrencies and non-fungible tokens (\u2018NFTs\u2019).\u00a0<\/strong>\n<ul class=\"wp-block-list\">\n<li>They are subject to a<strong> 30% income tax and 1 % TDS <\/strong>on transfers, with no set-off for losses.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>Expenses related to mining, transaction fees, and platform commissions cannot be deducted when calculating taxable income.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Way Ahead<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>India\u2019s decision to treat VDAs as <strong>property and capital assets <\/strong>is a step towards aligning with<strong> international legal standards.\u00a0<\/strong>\n<ul class=\"wp-block-list\">\n<li>The United States SEC classifies many crypto assets as securities, bringing them under financial market regulations.\u00a0<\/li>\n\n\n\n<li>This shift is critical <strong>for ensuring that VDAs do not exist in a legal grey area.\u00a0<\/strong><\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>By defining them as property, India gains the ability to tax, regulate, and seize crypto assets when necessary, preventing their misuse for illicit financial activities.\u00a0<\/li>\n\n\n\n<li>This requires a <strong>cohesive policy framework<\/strong> that integrates financial regulations, consumer rights, and technological advancements to ensure a balanced and secure digital asset ecosystem.<\/li>\n<\/ul>\n\n\n\n<p><strong>Source: <\/strong><a href=\"https:\/\/www.thehindu.com\/sci-tech\/technology\/the-implications-of-treating-virtual-digital-assets-as-taxable-properties\/article69286053.ece\" rel=\"nofollow noopener\" target=\"_blank\"><strong>TH<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p><strong><br \/>\nContext<\/p>\n<p><\/strong><\/p>\n<li class=\"ms-5\">\nThe Parliamentary Standing Committee on Finance, in its report on the Securities Market Code (SMC), has called for an \u201cappropriate regulatory framework\u201d for Virtual Digital Assets (VDAs) such as cryptocurrencies.<\/p>\n<\/li>\n<p><\/p>\n<p><strong><\/p>\n<p>Key Recommendations<\/p>\n<p><\/strong><\/p>\n<li class=\"ms-5\"\t>\nThe committee noted that VDAs and crypto-assets were presently unregulated in India, except for the limited purpose of taxation.<\/p>\n<\/li>\n<li class=\"ms-5\">\n<p>It recommended introducing an interim regulatory mechanism through recognised Self-Regulatory Organisations (SROs) operating under the oversight of the designated regulator.<\/p>\n<\/li>\n<p><a href=\" https:\/\/www.nextias.com\/ca\/current-affairs\/24-07-2026\/virtual-digital-assets-regulation \" class=\"btn btn-primary btn-sm float-end\">Read More<\/a><\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-80006","post","type-post","status-publish","format-standard","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/80006","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=80006"}],"version-history":[{"count":2,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/80006\/revisions"}],"predecessor-version":[{"id":80008,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/80006\/revisions\/80008"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=80006"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=80006"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=80006"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}