The new Income Tax Bill, introduced in Parliament by Finance Minister Nirmala Sitharaman on Thursday, maintains the existing definition of “virtual digital assets” while incorporating the definition proposed in the Finance Bill 2025. This clarification was provided through a frequently asked questions (FAQ) document released by the income tax department, outlining the broad scope of the new Income Tax Bill.
According to the FAQ, “The Income Tax Bill 2025 also contains all amendments proposed in Finance Bill 2025. Therefore, users are advised to compare the provisions of the Income Tax Act, 1961, with the proposed amendments in Finance Bill 2025 while reading the Income Tax Bill, 2025.” It emphasized that there is no change in the scope of ‘virtual digital assets’ under the new Income Tax Bill.
The definition included in the Bill reflects the amendment already proposed in the Finance Bill, 2025. This proposal aims to broaden the definition of virtual digital assets to encompass any crypto-asset that represents digital value, relying on a cryptographically secured distributed ledger or similar technology for validating and securing transactions—regardless of whether they fall under the existing definition of virtual digital assets. This amendment, which is part of a newly proposed reporting framework for crypto assets, is set to take effect from April 1, 2026.
Additionally, the definition of ‘undisclosed income’ for search and seizure proceedings has been expanded to include virtual digital assets. Sandeep Jhunjhunwala, M&A Tax Partner at Nangia Andersen LLP, noted that this extended definition aims to align with the definition of Crypto Assets within the Crypto-Asset Reporting Framework (CARF) established by the OECD.
Vikram Subburaj, CEO of Giottus Crypto Platform, heralded this development as a positive step towards establishing a well-regulated crypto environment in India. He stated, “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.”