The implications of treating Virtual Digital Assets as taxable properties

As digital economies expand and blockchain technology reshapes global finance, governments worldwide are grappling with the classification, regulation and taxation of Virtual Digital Assets (VDAs). India’s Income Tax Bill, 2025 introduces a comprehensive legal framework for VDAs defined in Section 2(111), aligning the country’s tax structure with global precedents. This move is crucial, considering how major economies like the U.K., the U.S., Singapore, Australia, New Zealand, and the UAE have approached VDAs — primarily as property or securities.

For the first time in India, the Income Tax Bill, 2025 explicitly treats VDAs as property (Section 92 (5)(f))  and capital assets. This classification has far-reaching consequences in terms of taxation, compliance, and legal recognition. The bill categorically states that VDAs, which include crypto assets, Non-Fungible Tokens (NFTs), and similar digital assets, should be considered property. This move aligns India with global practices, where digital assets are either classified as securities (like in the U.S.) or property (like in the U.K., Australia, and New Zealand).