The era of digitalization has proved to be a boon for the new and upcoming generation, opening gates for highly advanced and lucrative opportunities. With such a pace of technological advancement, emerges tremendous growth and wealth creation.
One of the trend setting examples is “Virtual Assets”. Now the questions which arise here is what is Virtual Digital Assets? How they have reached this much popularity and why we should know about it at all? All these questions can be answered by first understanding the basics.
Virtual Digital Assets or VDA refers to any information code, number or token (not being Indian or foreign currency) generated through cryptographic means or otherwise. In layman language we can refer it as a digital currency. Some of the well-known examples are Bit coin (BTC) or Crypto currency, Non fungible tokens (NFTs) etc.
As people are becoming more knowledgeable and financially literate along with the upward trend of capital market and technology, VDAs have gained a huge popularity. Recent study shows that Global Crypto Market size was valued at USD 4.06 Billion in 2021 and reached to USD 4.57 in 2022. Further, it is also estimated that the market will expand around 12 % by 2030.
VDAs are generally transacted with the help of “Virtual Assets Service Providers”, who conduct activities related to transfer or administration of virtual assets, as well as act as a safe keeper of VDAs.
Precisely speaking, Indian Markets are one of the top players in VDAs, as more and more people are getting enlightened about it. The major game changer proves to be the recent legislative frameworks happened to regulate the dealings in VDAs. The sole purpose of these regulations is to safeguard the economic market, as India ranked second in the list of top twenty countries with highest crypto currency adoption rates.
The Union Budget 2022-23, specifies that the income earned through VDAs are proposed to taxed at flat rate of 30% under the head Business Income or treated as Capital Gain as the case may be as per the Income Tax Act 1961. It must be noted that, transacting in VDAs now also comes under the ambit of Prevention of Money Laundering Act 2002.
Thus, we can conclude that with a perfect blend of start-ups and investors, while embracing the block chain technology, Virtual Digital Assets stands have immense possibilities of growth and success along with robust regulatory frameworks. This will enable investors to transact seamlessly, as well as ensure their protection resulting in immense capital generation and wealth creation.
– NISHA PANWAR