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Economic Times
a day ago
- Business
- 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
- Business
- 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.
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Business Standard
2 days ago
- Business
- Business Standard
CBDT sends emails over undisclosed crypto income in latest NUDGE drive
The Central Board of Direct Taxes (CBDT) has sent emails to thousands of individuals who may have under-reported income from crypto transactions, asking them to review and update their income tax returns (ITRs), according to CBDT sources. 'The department has recently sent emails to thousands of defaulting persons to review their ITR and update it if any income on account of VDA (virtual digital asset) transactions has not been properly declared. Those who fail to respond to the nudge may be picked for verification or scrutiny,' an official said. 'Using data analytics, the tax department has flagged cases where taxpayers either failed to file the mandatory Schedule VDA in their ITR or declared such income incorrectly by claiming lower tax rates or disallowed deductions such as indexation,' the source said. According to CBDT sources, the department is also matching income tax returns with tax deducted at source (TDS) returns filed by Virtual Asset Service Providers (VASPs), such as crypto exchanges, to identify discrepancies. Income from the transfer of VDAs is taxable at a flat 30 per cent under Section 115BBH of the Income Tax Act, 1961, without any deductions except cost of acquisition. Losses from such transactions cannot be set off or carried forward. This is the third NUDGE campaign by the CBDT in the past six months under its 'TRUST — Taxpayers First' initiative. Previous drives focused on non-disclosure of foreign assets and bogus deductions under Section 80GGC. The emails have been sent in relation to Assessment Years 2023–24 and 2024–25, based on discrepancies detected in crypto-related disclosures during these periods.
