Economy · 25 Jul 2026

Securities Market Code 2025 VDA

With reference to the regulation of Virtual Digital Assets (VDAs) in India, consider the following statements:

  1. VDAs currently fall outside the ambit of the Securities Market Code, 2025 because the Code defines securities in a technology-neutral manner.
  2. VDA transfer income is subject to a flat 30 percent tax with no provision for loss offset.
  3. VDA service providers have been designated as "reporting entities" under the Prevention of Money Laundering Act.
  4. The Parliamentary Standing Committee on Finance has recommended that a comprehensive standalone VDA law be enacted immediately, bypassing any interim regulatory mechanism.

How many of the above statements are correct?

AOnly one
BOnly two
COnly three
DAll four

Tests the ability to distinguish the Committee's actual phased policy recommendation from a superficially plausible but incorrect alternative sequencing.

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This question is based on: Need a regulatory framework for virtual digital assets, says House finance panel
Take this in full test mode → Instructions for 25 Jul 2026
About this question

Why in news

The Parliamentary Standing Committee on Finance flagged a "regulatory vacuum" around India's roughly 12 crore VDA users, who are taxed and monitored for money laundering but lack any dedicated market regulator.

Why for UPSC

This tests whether an aspirant can distinguish the Committee's actual phased recommendation (interim SRO, then full law) from a plausible-sounding but incorrect "skip straight to full law" alternative - a nuanced policy-sequencing distinction UPSC likes to test.

Prelims summary

VDAs fall outside the technology-neutral Securities Market Code, are taxed at a flat 30% with no loss offset and are PMLA reporting entities - but the Committee recommends an interim SRO framework, not an immediate standalone law.

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