&w=3840&q=100)
Unaccounted income invested in Virtual Digital Assets on CBDT radar
The Central Board Direct Taxes (CBDT) is investigating tax evasion and laundering of unaccounted income by high-risk persons through investment in crypto currency.
Such entities and individuals which are engaged in Virtual Digital Asset (VDA) transactions and have failed to comply with the Income-tax Act, 1961 have been identified for verification, sources said.
As per the Section 115BBH of Income Tax Act, 1961 inserted by the Finance Act, 2022 a flat tax rate of 30 per cent (plus applicable surcharge and cess) on income from VDA transfer is applicable. The provision does not allow deduction of any expenses except cost of acquisition.
Further, set-off of loss from VDA investment or trading is not allowed to be set off against any other income or for carry forward to subsequent years.
Sources pointed out that data analytics has shown that a significant number of persons have violated provisions of Income Tax Act by not filing Schedule VDA of ITR and offering tax on the income earned at lower rate or claiming cost indexation.
ITRs filed by taxpayers are being verified with TDS returns filed by the Virtual Asset Service Providers (VASPs) popularly known as crypto exchanges and defaulters may be selected for further verification/scrutiny, they said.
It is learnt that CBDT has recently sent emails to thousands of defaulting persons to review their ITR and update if any income on account of VDA transactions have not been properly declared.
CBDT has recently embarked on a new approach termed as NUDGE (Non-intrusive Usage of Data to Guide and Enable) Taxpayers, as a part of TRUST Taxpayers FIRST philosophy. This campaign is seen as the third NUDGE campaign launched by CBDT in the last six months.
Earlier, NUDGE campaigns were on declaration of foreign assets/income by taxpayers and withdrawal of bogus claims of deduction under section 80GGC.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Mint
4 hours ago
- Mint
Charitable and religious trusts, research institutions to face increased I-T scrutiny
NEW DELHI : Income tax return (ITR) forms of charitable trusts and research institutions that have wrongfully claimed tax exemptions, as well as entities and individuals that have had repeated additions to their tax liability, will be automatically selected for scrutiny this year. In its latest guidelines, the Central Board of Direct Taxes (CBDT) has allowed its senior field officers until 30 June to issue notices on such ITRs. Charitable and religious trusts, as well as research institutions, claiming tax exemption under the Income Tax Act's Section 11 must register again, as per the changes in law introduced with effect from 1 April 2021 to improve compliance and to avoid roving enquiries into their affairs. Also Read: Here's all you need to know about Form 16 before filing your income tax return The CBDT's guidelines said that cases where such registration has not been granted or has been revoked by the end of March 2024 and the institution has claimed tax exemption in 2024-25, shall be scrutinized by the department's faceless assessment centre. Cases where withdrawal of registration is set aside in appellate proceedings will be excluded. In addition to registration, charitable and religious trusts and institutions must ensure that 85% of the donations are used for charitable or religious purposes to be eligible for the benefit. Universities and research institutions that do not claim tax benefits under other provisions of the law can also claim tax exemption under Section 11. Individuals and entities that have been subject to a survey—a visit by tax officials that is less stringent than a search—and those that have been searched after 1 April 2023 will also have their ITRs automatically scrutinized this assessment year. Also Read: New income tax bill provisions grant wide search powers to authorities, make privacy of taxpayers vulnerable Also, taxpayers in metro cities and other places, who have had additions made to their tax liability repeatedly in the past, above specific thresholds, will get tax scrutiny notices by the end of June. So would cases flagged by any other regulator, law enforcement agency, or intelligence agency for alleged tax evasion. Stricter, clearer norms The guidelines for compulsory selection of ITRs for scrutiny in 2025-26 are consistent with those of prior years, but some noteworthy changes have been introduced in the threshold limits for recurring issues from past assessments, according to experts. 'Previously, additions exceeding ₹25 lakh for cases in eight metro jurisdictions and ₹10 lakh for cases in non-metro jurisdictions triggered automatic scrutiny. Under the revised guidelines, these thresholds have been increased to ₹50 lakh and ₹20 lakh, respectively. The move is expected to significantly reduce the number of cases selected for compulsory scrutiny," said Manish Garg, lead- transfer pricing and litigation, AKM Global, a tax and consulting firm. 'Additionally, the guidelines now prescribe stricter timelines to forward the details of selected cases to assessment units, aiming to streamline the assessment process. These changes will not only ease the compliance burden on taxpayers but also provide both tax authorities and assessees with adequate time for a more thorough and balanced assessment proceeding," added Garg. Also Read: Mint Quick Edit | Income tax: How close should authorities look? The apex direct tax policymaking body clarified that international tax matters and complex cases handled by the specialized wing of the department, central charge, are not covered under the department's faceless assessment scheme. Queries emailed to the CBDT seeking comments for the story remained unanswered until the time of publishing.
Economic Times
a day ago
- Economic Times
Explained: CBDT targets unaccounted income invested in crypto
The Central Board of Direct Taxes (CBDT) is investigating tax evasion and the laundering of undeclared money by high-risk individuals who have invested in cryptocurrency or virtual digital assets (VDAs). Why is the tax body doing this? The main reason is to curb tax evasion and the laundering of unaccounted funds. Sources told PTI that the CBDT has identified some "high-risk persons" who are putting money in VDAs but have not complied with the Income Tax Act. Data reviewed by the I-T department showed violations such as not filing the mandatory Schedule VDA in their income tax returns (ITRs), paying tax at lower rates, or wrongly claiming cost indexation. The tax body is matching ITRs filed by taxpayers with the TDS data submitted by crypto exchanges to identify taxpayers who have wrongly declared their crypto income. CBDT has recently embarked on a new approach termed NUDGE (Non-intrusive Usage of Data to Guide and Enable) Taxpayers, as part of the TRUST Taxpayers FIRST philosophy. Under this, the CBDT is reaching out to thousands of individuals, asking them to review their returns or update them if their transactions are not properly declared. This is to give people a chance to voluntarily comply before stringent actions are taken. Beyond taxation, the government has shown concern about the likely misuse of cryptocurrencies for illegal activities such as terror financing and money laundering. Existing framework India has not formally recognised cryptocurrency as a legal tender, but the government introduced a taxation framework for VDAs in 2022. This includes: A flat 30% tax on income from VDA transfers. A 1% tax deducted at source (TDS) on the sale consideration of VDAs. No deduction of any expenses (except the cost of acquisition) is allowed. Losses from VDA investments or trading cannot be set off against any other income or carried forward to subsequent years.
Time of India
a day ago
- Time of India
Explained: CBDT targets unaccounted income invested in crypto
The Central Board of Direct Taxes ( CBDT ) is investigating tax evasion and the laundering of undeclared money by high-risk individuals who have invested in cryptocurrency or virtual digital assets ( VDAs ). Why is the tax body doing this? The main reason is to curb tax evasion and the laundering of unaccounted funds. Sources told PTI that the CBDT has identified some "high-risk persons" who are putting money in VDAs but have not complied with the Income Tax Act. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like An engineer reveals: 1 simple trick to get all TV channels Techno Mag Learn More Undo Data reviewed by the I-T department showed violations such as not filing the mandatory Schedule VDA in their income tax returns (ITRs), paying tax at lower rates, or wrongly claiming cost indexation. The tax body is matching ITRs filed by taxpayers with the TDS data submitted by crypto exchanges to identify taxpayers who have wrongly declared their crypto income. Live Events CBDT has recently embarked on a new approach termed NUDGE (Non-intrusive Usage of Data to Guide and Enable) Taxpayers, as part of the TRUST Taxpayers FIRST philosophy. Under this, the CBDT is reaching out to thousands of individuals, asking them to review their returns or update them if their transactions are not properly declared. This is to give people a chance to voluntarily comply before stringent actions are taken. Discover the stories of your interest Blockchain 5 Stories Cyber-safety 7 Stories Fintech 9 Stories E-comm 9 Stories ML 8 Stories Edtech 6 Stories Beyond taxation, the government has shown concern about the likely misuse of cryptocurrencies for illegal activities such as terror financing and money laundering . Existing framework India has not formally recognised cryptocurrency as a legal tender, but the government introduced a taxation framework for VDAs in 2022. This includes: A flat 30% tax on income from VDA transfers. A 1% tax deducted at source (TDS) on the sale consideration of VDAs. No deduction of any expenses (except the cost of acquisition) is allowed. Losses from VDA investments or trading cannot be set off against any other income or carried forward to subsequent years.
