The new Income Tax Bill that was introduced in the Parliament by Finance Minister Nirmala Sitharaman on Thursday has not changed the scope of “virtual digital assets” but has incorporated the definition proposed in the Finance Bill 2025.
This was clarified in the frequently asked questions (FAQ) released by the income tax department on the broad scope of new Income Tax Bill.
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“The Income Tax Bill 2025 also contains all amendments proposed in Finance Bill 2025. Therefore, the users are advised to compare the provisions of the Income Tax Act, 1961, as updated with proposed amendments in Finance bill 2025, while reading the Income Tax Bill, 2025,” said the FAQ, adding that there is no change in the scope of ‘virtual digital asset’ under the Income Tax Bill, 2025.
“The definition under the Bill incorporates the amendment already proposed under the Finance Bill, 2025,” it said.
The Finance Bill 2025 proposed to amend the definition of virtual digital asset to also include any crypto-asset being a digital representation of value that relies on a cryptographically secured distributed ledger or a similar technology to validate and secure transactions, whether or not already included in the definition of virtual digital asset or not. The amendment, which is a part of the proposed new reporting framework for crypto assets, will take effect from April 1, 2026.
It has also expanded the definition of ‘undisclosed income’ for the purpose of search and seizure proceedings to include virtual digital assets.
Sandeep Jhunjhunwala, M&A Tax Partner at Nangia Andersen LLP had noted that the definition of virtual digital assets is sought to be extended to align with the definition of Crytpo Assets in the Crypto-Asset Reporting Framework (CARF) designed by the OECD.
Vikram Subburaj, CEO, Giottus Crypto Platform said this is a positive development towards a well-regulated crypto environment in India. “Clear definitions like these and reporting frameworks will lead to more constructive dialogue on taxation, compliance, and innovation. This will help India navigate the future of tokenized assets, decentralized finance (DeFi), and Web3 at a much faster pace,” he said.