Section 2(47A)

Section 2(47A) — the law in short

What the courts have decided on section 2(47A), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Rhutikumari v Zanmai Labs High CourtCuts both waysValidity unconfirmed
  The AO says crypto was not property at all before the 2022 amendments, so my gain cannot be a capital gain. Is there a High Court holding that crypto is property?
  Yes, but from outside the tax jurisdiction. Hearing an application for interim protection in a WazirX dispute, the Madras High Court held that crypto currency is property — not tangible property and not currency, but property capable of being enjoyed, possessed in a beneficial form and held in trust. It is a civil ruling under the Arbitration and Conciliation Act, not a decision on the Income-tax Act, so it supports the characterisation argument without deciding any head of income.
• Brijesh Poddar v ITO ITATHelps taxpayerValidity unconfirmed
  I borrowed money to buy crypto. Can I deduct the interest against my 115BBH income?
  That is what a single note reports, and nothing about the order can be checked. The judgment could not be found in a full-text subscription research database on a search of the party name, the appeal number or the section, and there is no decision of any Tribunal or High Court on s.115BBH in that database at all. What the note reports is that interest on funds borrowed exclusively to acquire virtual digital assets, up to the date of acquisition, was treated as part of the cost of acquisition, s.115BBH(2)(a) barring every other deduction but not defining that expression. Treat it as a line of argument, not as authority.
• Ankit Kabra v ITO ITATHelps departmentValidity unconfirmed
  My client's total income is under Rs 7 lakh but it includes a small crypto gain, and the CPC has knocked out his Rs 25,000 rebate under section 87A. Is that right?
  On this decision, yes. The Surat Bench held that where the tax on VDA income is computed under s.115BBH, the case is not covered by s.115BAC and the rebate under the proviso to s.87A — which is expressed to apply where the total income is chargeable to tax under s.115BAC(1A) — is therefore not available against it. The appeal was dismissed and the disallowance of the Rs 25,000 rebate for AY 2024-25 was upheld.
• Raunaq Prakash Jain v ITO ITATHelps taxpayerValidity unconfirmed
  I sold Bitcoin in FY 2020-21, before the VDA regime — capital gains or income from other sources?
  Capital gains, for that year. For AY 2021-22 Bitcoin was a capital asset under s.2(14), so the gain fell under the capital gains head and not s.56, and a holding period of more than three years made it long-term and eligible for s.54F relief on reinvestment in property. This decides only years before the virtual digital asset regime took effect on 1 April 2022; for years inside that regime s.115BBH governs and this answer does not carry across.
• Statutory position — section 285BAA: the crypto-asset reporting entity's statement, and why section 115BBI is a different thing entirely CBDT Circulars & InstructionsCuts both ways
  Our exchange has been told it is a 'reporting entity' for crypto-assets. What does section 285BAA actually require, and is section 115BBI part of the same regime?
  Section 285BAA, inserted by the Finance Act 2025 with effect from 1 April 2026, requires a prescribed reporting entity in respect of a crypto-asset to furnish information about transactions in such crypto-assets in a statement, for such period and within such time, form and manner and to such income-tax authority as prescribed. If the authority thinks the statement defective it must intimate the defect and allow thirty days or longer to rectify, failing which the Act applies as if inaccurate information had been furnished; if no statement is filed the authority may serve a notice requiring one within not more than thirty days; and a reporting entity that later discovers an inaccuracy must inform the authority and furnish the correct information within ten days. The Central Government may prescribe registration of reporting entities, the nature and manner of maintaining information, and the due diligence for identifying crypto-asset users and owners. Section 115BBI is NOT part of this regime: it is a thirty per cent charge on the 'specified income' of certain funds, trusts, universities and hospitals under s.10(23C) and s.11, and has nothing to do with virtual digital assets.
• CBDT Notification 19/2026 on crypto reporting CBDT Circulars & InstructionsHelps department
  Do I have to report my crypto holdings now, or does the exchange do it for me?
  The platform does. Reporting Crypto-Asset Service Providers — Indian exchanges, custodians, wallet providers, broker-dealer platforms and offshore providers servicing Indian users — must report crypto-asset transactions in Form 167 under rules 241 to 244. The compliance burden is placed on the platforms, not on individual investors.
• Statutory position — section 115BBH: thirty per cent, cost of acquisition only, and TWO separate loss bars CBDT Circulars & InstructionsCuts both ways
  My client traded crypto in FY 2023-24 and made a gain on some coins and a loss on others. Can he net the loss off against the gain, and can he carry the balance forward?
  Section 115BBH taxes income from the transfer of a virtual digital asset at a flat thirty per cent from AY 2023-24, and it contains four things, not two. Sub-section (1)(a) fixes the rate; sub-section (2)(a) allows no deduction for any expenditure other than cost of acquisition, and no allowance, and no set off of any loss, in computing that income; sub-section (2)(b) is a SEPARATE bar which stops a loss from the transfer of a virtual digital asset being set off against income computed under any other provision of the Act, and stops that loss being carried forward to succeeding assessment years at all. Sub-section (3) applies the s.2(47) meaning of 'transfer' to a virtual digital asset whether or not it is a capital asset.
• CBDT Circular 23/2022 - the VDA regime's first year CBDT Circulars & InstructionsCuts both ways
  From which assessment year does the flat 30% charge on crypto actually begin, and has the Board itself said anything about set-off?
  Assessment year 2023-24, that is financial year 2022-23. Paragraph 6 of the Board's Explanatory Notes to the Finance Act 2022 records that the s.115BBH amendment "takes effect from 1st April, 2023 and will accordingly apply in relation to the assessment year 2023-24 and subsequent assessment years". The same paragraph restates the set-off bar in the Board's own words - no set off of any loss arising from transfer of a virtual digital asset against any income computed under any provision of the Act, and no carry forward. The 1% under s.194S is separately recorded as effective from 1st July, 2022.
• Statutory position — section 194S: one per cent on payment for transfer of a VDA, from 1 July 2022 CBDT Circulars & InstructionsCuts both ways
  We are paying for crypto bought from an Indian seller. Do we deduct tax, at what rate, and is there a threshold below which we can ignore it?
  Yes, from 1 July 2022. Section 194S requires any person responsible for paying a resident any sum by way of consideration for transfer of a virtual digital asset to deduct one per cent of that sum, at the time of credit to the resident's account or at the time of payment, whichever is earlier. No tax is deducted where the payer is a 'specified person' and the value or aggregate value of the consideration does not exceed Rs 50,000 during the financial year, or where the payer is anyone else and it does not exceed Rs 10,000 during the financial year. Where the consideration is wholly in kind, or is a swap of one VDA for another, or the cash part is not enough to fund the deduction, the payer must ensure the tax has been paid BEFORE releasing the consideration.
• CBDT Notifications 74 & 75/2022 CBDT Circulars & InstructionsCuts both waysSuperseded by amendment
  Are gift cards, loyalty points and NFTs backed by a physical asset caught by the crypto tax rules?
  No. Notification 74/2022 excludes gift cards, vouchers, reward points and loyalty cards from the s.2(47A) definition, and Notification 75/2022 excludes physical NFTs — tokens whose transfer results in transfer of ownership of an underlying tangible asset. What remains inside the regime is crypto-assets and notified NFTs.
• CBDT Circular 14/2022 CBDT Circulars & InstructionsCuts both waysValidity unconfirmed
  I bought crypto directly from the seller, no exchange — do I deduct? And what if I paid in crypto rather than cash?
  You deduct. In a peer-to-peer transfer the buyer is the person paying the consideration and must deduct under s.194S. Where the consideration is in kind, or is itself another virtual digital asset, the payer must ensure the tax has actually been paid before releasing the consideration — and on a swap each party is both buyer and seller, so each deducts on the transfer it makes.
• CBDT Circular 13/2022 CBDT Circulars & InstructionsCuts both ways
  I trade crypto on an exchange. Who deducts the 1% under s.194S, on what amount, and what changes if a broker is in the chain?
  The exchange. Where a transfer takes place on or through an exchange that is not itself the owner, only the exchange crediting or paying the seller deducts. Where a broker is in the chain, the obligation moves to the broker only if there is a written agreement between the exchange and the broker allocating it. Where the exchange itself owns the asset, the buyer may by written agreement leave the deduction and payment to the exchange.
• Statutory position — section 2(47A): what is a virtual digital asset, and what the Government can take out of it CBDT Circulars & InstructionsCuts both waysValidity unconfirmed
  The notice says my client dealt in a 'virtual digital asset'. What actually falls inside that definition, and are vouchers, reward points and NFTs inside it?
  Section 2(47A), inserted by the Finance Act 2022 with effect from 1 April 2022, defined a virtual digital asset in three limbs for AY 2023-24 to AY 2025-26 — a fourth sub-clause (d) has since been added, which this entry does NOT set out because it could not be read (see the editor note) — (a) any information, code, number or token, not being Indian or foreign currency, generated through cryptographic means or otherwise, providing a digital representation of value exchanged with or without consideration, with the promise or representation of having inherent value, or functioning as a store of value or a unit of account, and capable of being transferred, stored or traded electronically; (b) a non-fungible token or any other token of similar nature; and (c) any other digital asset the Central Government notifies. A proviso lets the Central Government notify EXCLUSIONS from the definition, subject to conditions, and the Explanation makes 'non-fungible token' itself mean only such digital asset as the Government notifies, and imports the FEMA meanings of 'currency', 'foreign currency' and 'Indian currency'.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.