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In addition, you would pay a 10000 rupee digital asset transaction tax (1%) on the purchase and a 14000 digital asset transaction tax on the sale for a total digital asset tax of 204,000 rupees (it isn't entirely clear from the available information if the transaction tax on digital asset payments is owed by both the seller and the buyer, by only the seller, by only the buyer, or half by each, these examples assume that the 1% transaction tax applies to both the seller and to the buyer, but this might end up being different in the final adopted legislation).

After the digital assets tax, you would have 1,396,000 rupees left over from your starting investment of 1,000,000 rupees.

But, suppose you only bought the Bitcoin, and not the NFTs, and had a loss of 400,000 rupees, but also had 1,000,000 rupees of salary income from you job as an architect that year. You wouldn't have any digital asset income tax. Your digital asset transaction tax would be 12,000 rupees, even though you made a loss (subject to the lack of clarity in how the transaction tax works), and you wouldn't be able to apply your Bitcoin losses to the taxes you owe on your ordinary income from your salary.

This tax is not intended to apply to software sales and sales of digital services.

In addition, you would pay a 10000 rupee digital asset transaction tax (1%) on the purchase and a 14000 digital asset transaction tax on the sale for a total digital asset tax of 204,000 rupees

Note that it isn't entirely clear from the available information if the transaction tax on digital asset payments is owed by both the seller and the buyer, by only the seller, by only the buyer, or half by each. These examples assume that the 1% transaction tax applies to both the seller and to the buyer, but this might end up being different in the final adopted legislation.

After the digital assets tax, you would have 1,396,000 rupees left over from your starting investment of 1,000,000 rupees. Good job! You can afford a wild and crazy party with your friends from your profits.

But, suppose you only bought the Bitcoin, and not the NFTs, and had a loss of 400,000 rupees, but also had 1,000,000 rupees of salary income from you job as an architect that year. 

You wouldn't have any digital asset income tax, but your digital asset transaction tax would be 12,000 rupees, even though you made a loss (subject to the lack of clarity in how the transaction tax works). You wouldn't be able to apply your Bitcoin losses to the taxes you owe on your ordinary income from your salary, however.

This tax is not intended to apply to software sales and sales of digital services. The new tax law will probably have an exemption from the digital assets tax for software and will probably treat software the same way that it does now under India's tax laws.

Even if it did apply to software, however (and the details may change in the legislative process) it would only be a 30% tax on the profits YZX Pvt ltd made from selling the software to a retail purchaser, not a tax on the gross sale price of the softwware, although there might be a 1% sales tax on the gross sale price if the tax were expanded from the current proposal to include software.

The government has an idea for raising new revenue and have put it as a placeholder until authorizing legislation is in place. But it isn't a law yet, as of February 3, 2022. It would often be the case that the final tax legislation will differ greatly from the proposed litigation in most details relevant to a taxpayer. The legislation is subject to amendment before it becomes law at this point (although there may be more recent developments of which I am not aware). It will probably take many months to pass a law enacting such a tax, if it happens at all.

The proposed tax is discussed here. The summary available at this link, which is probably from a press release of the government rather than proposed legislative language, is as follows:

The government has an idea for raising new revenue and have put it as a placeholder in its budget until authorizing legislation for the new tax is in place. But it wasn't a law yet, as of February 3, 2022.

Frequently, final tax legislation differs greatly from the originally proposed tax legislation in most details relevant to a taxpayer. The proposed tax legislation is subject to amendment in the legislative process before it becomes law (although there may be more recent developments of which I am not currently aware at some point). It will probably take many months to pass a law enacting such a tax, if it happens at all.

The proposed tax is discussed at this CNBC story from February 3, 2022. The summary available at this link, which is probably based upon a press release of the government, rather than its proposed legislative language, is as follows:

The proposed tax is discussed here. But it does not appear to have been adopted as law yet, and it would frequently be the case that the final tax legislation will differ greatly from the proposed litigation in most details relevant to a taxpayer. The legislation is subject to amendment before it becomes law at this point as I understand the situation (although there may be more recent developments of which I am not aware). The summary available at the link, which is probably from a press release of the government rather than proposed legislative language, is as follows:

Basically, this is a capital gains tax on cryptocurrencies and non-fungible tokens (NFTs), but with no deductions for cryptocurrency losses against another other than cryptocurrency income, together with a 1% sales tax on cryptocurrency transaction costs. Consider this example:

In addition, you would pay a 10000 rupee digital asset transaction tax (1%) on the purchase and a 14000 digital asset transaction tax on the sale for a total digital asset tax of 204,000 rupees (it isn't entirely clear from the available information if the transaction tax on digital asset payments is owed by both the seller and the buyer, by only the seller, by only the buyer, or half by each).

After the digital assets tax, you would have 1,396,000 rupees left over from your starting investment of 1,000,000 rupees.

This tax is not intended to apply to software sales and sales of digital services.

Q2. What is it actually this tax on digital assets mean in current budget? Can anyone help me with brief details?

The government has an idea for raising new revenue and have put it as a placeholder until authorizing legislation is in place. But it isn't a law yet, as of February 3, 2022. It will probably take many months to pass a law enacting such a tax, if it happens at all.

Q2. What is it actually this tax on digital assets mean in current budget? Can anyone help me with brief details?

The government has an idea for raising new revenue and have put it as a placeholder until authorizing legislation is in place. But it isn't a law yet, as of February 3, 2022. It would often be the case that the final tax legislation will differ greatly from the proposed litigation in most details relevant to a taxpayer. The legislation is subject to amendment before it becomes law at this point (although there may be more recent developments of which I am not aware). It will probably take many months to pass a law enacting such a tax, if it happens at all. 

The proposed tax is discussed here. The summary available at this link, which is probably from a press release of the government rather than proposed legislative language, is as follows:

Basically, this is a capital gains tax on cryptocurrencies and non-fungible tokens (NFTs), but with no deductions for cryptocurrency/NFT losses against income other than cryptocurrency/NFT income, together with a 1% sales tax on cryptocurrency/NFT transaction payments.

Example One

In addition, you would pay a 10000 rupee digital asset transaction tax (1%) on the purchase and a 14000 digital asset transaction tax on the sale for a total digital asset tax of 204,000 rupees (it isn't entirely clear from the available information if the transaction tax on digital asset payments is owed by both the seller and the buyer, by only the seller, by only the buyer, or half by each, these examples assume that the 1% transaction tax applies to both the seller and to the buyer, but this might end up being different in the final adopted legislation).

After the digital assets tax, you would have 1,396,000 rupees left over from your starting investment of 1,000,000 rupees.

Example Two

This tax is not intended to apply to software sales and sales of digital services.