Internal Assessment – Component 1

Law of Taxation 2023

Dr. Rohit Roy

You are a tax consultant advising a client, Mr X, who recently inherited a substantial amount
of digital assets from a deceased family member, including cryptocurrencies and non-fungible
tokens (NFTs). Mr. X is seeking guidance on the tax implications of these digital assets. Your
task is to analyse the tax treatment of these assets and provide comprehensive advice to Mr
X. Your answer should be well-structured and supported by relevant tax laws, regulations,
and court cases.

Instructions:
1. Identify and classify the different types of digital assets that Mr. X has inherited.
2. Discuss the relevant tax laws, regulations, and Income Tax Department guidance that
pertain to the taxation these digital assets.
3. Analyse any potential tax consequences, exemptions, deductions, or credits applicable to
these assets.
4. Address any reporting requirements and deadlines that Mr. X must adhere to.
5. Consider any recent legal developments or pending legislation that may impact the taxation
of digital assets.
6. Provide Mr. X with a clear, step-by-step plan of action regarding how to handle these assets
from a tax perspective.

Collaboration: This is an individual take-home exam. Collaboration with classmates,

discussing the problem, or sharing answers is strictly prohibited.

Any evidence of collaboration may result in severe academic penalties and the requirement
to justify the analysis through a viva.

Total Marks: 40

Grading Criteria:
You will be graded based on your ability to:
- Analyse and apply relevant tax laws and regulations to the identified digital assets.
- Provide a well-structured, coherent, and comprehensive response.
- Consider recent legal developments and potential implications.
- Clearly communicate advice to Mr. X.

Rubrics:

Criteria Excellent (5) Good (4) Satisfactory (3) Needs Poor

Improvement (0)
(1-2)
Application of Tax Application of Application of Application of tax Application of tax
Laws relevant tax laws is relevant tax laws laws contains laws is mostly
comprehensive, is mostly some incorrect or
accurate, and well- accurate and inaccuracies or incomplete.
referenced. well-referenced. omissions.
Analysis of Tax Analysis of tax Analysis of tax Analysis of tax Analysis of tax
Consequences consequences is consequences is consequences consequences is
comprehensive, well-considered lacks depth or superficial or
well-considered, and insightful. overlooks key incorrect.
and insightful. aspects.
Consideration of Thorough Consideration of Consideration of Consideration of
Legal consideration of legal legal legal
Developments recent legal developments is developments is developments is
developments and well-informed limited or lacks inaccurate or
potential and insightful. depth. absent.
implications.
Communication of Clear, concise, and Advice is well- Advice is Advice is unclear,
Advice actionable advice structured and somewhat vague, or
provided to Mr. effectively unclear or lacks incomplete.
Smith. communicated. specificity.