Finance Act 2022: virtual digital assets taxed at 30%, stricter charity compliance, faceless assessment expanded.
The Finance Act, 2022 revises income tax chargeability, surcharge bands and adds a 4% Health and Education Cess; defines "virtual digital asset" and taxes transfers of such assets at 30% with only cost of acquisition allowed and no carry forward of losses; tightens trust and institutional compliance by amending sections on registration, corpus, accumulation, audit and cancellation of approvals; creates a 24 month updated return regime with required tax payment and additional income tax for delays; expands faceless assessment architecture and prescribes electronic process, video hearings and automated workflows; and updates customs/excise tariff rates and classifications.

Finance Bill 2022 taxes transfers of virtual digital assets at 30% with no deductions allowed.
The Bill defines virtual digital asset and establishes a dedicated tax regime: income from transfer of virtual digital assets is subject to tax at thirty per cent, with no deduction except cost of acquisition, no set off of losses against other income, and no carry forward of such losses; a parallel thirty per cent rate applies to specified incomes of certain exempt entities; the Central Government may, by notification, exclude particular digital assets from the definition.

Definition of Transfer expanded to include virtual digital assets, changing tax treatment and reporting obligations for such assets.
Proposed Finance Bill amendments expand statutory references to include electronic and digital forms, explicitly apply the concept of transfer to virtual digital assets, and create a recomputation rule treating disallowed surcharge or cess deductions as deemed under reported income for penalty purposes while allowing a prescribed recomputation and payment route to avert under reporting treatment.