Unaccounted income by high-risk persons through investment in crypto currency is under government scrutiny. The tax department sources have said that it is probing evasion and laundering via crypto currencies during assessment years 2023-24 and 2024-25.
It is learnt from reliable sources that the tax department has recently sent e-mails to thousands of defaulting persons to review their income tax returns and update if any income on account of Virtual Digital Asset (VDA) transactions have not been properly declared.
“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,” said sources in the tax department.
The government has levied a flat tax rate of 30% (plus applicable surcharge and cess) on income from VDA transfer. 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. The government also levies 1% TDS on every crypto transaction.