Virtual Digital Assets:
The Finance Ministry recently brought out a notification placing all transactions involving virtual digital assets under the purview of the Prevention of Money Laundering Act (PMLA).
- According to the Income tax act, ‘virtual digital asset’ refers to any information, code, number, or token (not being Indian currency or foreign currency) generated through cryptographic means or otherwise and can be called by whatever name.
- It can be transferred, stored, or traded electronically.
- The definition of VDA also specifically includes a non-fungible token, i.e., NFT, or any other token of similar nature, by whatever name is called.
- Non-fungible tokens (NFTs) are assets that have been tokenized via a blockchain.
- They are assigned unique identification codes and metadata that distinguish them from other tokens.
- NFTs can be traded and exchanged for money, cryptocurrencies, or other NFTs.
- NFTs can represent digital or real-world items like artwork and real estate.
- They can also represent individuals’ identities, property rights, and more.