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Crypto Tax Dodge? 44,000 Hit!
12 Dec
Summary
- Over 44,000 taxpayers flagged for VDA transaction non-reporting.
- Schedule VDA requires detailed reporting of every VDA transfer.
- Penalties for non-reporting can reach 78% tax plus fines.
The Finance Ministry has issued notices to over 44,000 taxpayers who failed to report virtual digital asset (VDA) transactions in their income-tax returns. This action highlights the increasing scrutiny on crypto investments and the importance of accurate disclosure under Schedule VDA, which requires comprehensive details of every VDA transfer.
Taxpayers must meticulously track acquisition costs and sale prices, ensuring consistency with TDS data reflected in their Annual Information Statement (AIS) and Form 26AS. Mismatches, especially those exceeding approximately Rs 1 lakh, can trigger scrutiny. For overseas crypto holdings, residents must also report these assets in Schedule FA, creating a dual reporting obligation.
Penalties for non-reporting or under-reporting can be severe, potentially including a flat 30% tax on gains, fines up to three times the tax, or classification of assets as unexplained income taxed at approximately 78%. Seeking advice from crypto-aware tax professionals and filing revised returns promptly can mitigate penalties.
