India’s tax authorities have strengthened the game of cryptocurrency reporting. Thousands of taxpayers are notified of lost revenue from virtual digital assets.
The move is part of a broader drive to discover hidden gains and launder money through digital tokens.
Crypto holders are under censorship
According to officials, the Central Direct Tax Commission is checking whether people include cryptocurrency transactions in the Schedule VDA. Many high-risk profiles are underestimated or skipped altogether.
Crypto exchanges or VASPs, file TDS reports, these numbers do not always match what is displayed in the income tax return. The gap triggered a wave of alarms and letters.
Explained the 30% tax rule for the plane
According to the report, Section 115BBH of the Income Tax Act imposes a 30% uniform tax on proceeds from VDA transfers. You can only subtract the cost of buying an asset. No other deductions are allowed.
And you can’t cause any loss or push it. Many taxpayers try to use cost indexes or other headers to claim VDA losses. Now, this error brings interest and fines.
Promote compliance with campaign goals
This is the third “push” (non-invasive data usage to guide and enable) to drive within six months. The first two focus on undeclared foreign assets and false political donation claims under Section 80GGC.
The idea is to use data rather than raids to make people determine their rewards. Tax agencies combine bank data, TDS files from VASP, and even blockchain checks. Officials say it is a soft touch that shapes behavior without heavy tactics.
Traders and communication risks
The bet will get higher for anyone who trades a small amount. If they have been profiting from cryptocurrencies since fiscal 2022-23, they need to show it. Missed items in Schedule VDA may bring them notifications and additional bills.
Communication is also under pressure to report correctly. Any swipe in their TDS application can cause more inquiries to the client.
Now, notice how traders and service providers will react. Some people may launch better record keeping. Others may reduce transactions to avoid taxes. Institutions can comfort the rules are clear and enforced. This legal certainty may attract more serious participants to the market.
Featured images from Unsplash, charts for TradingView
Editing process For Bitcoin experts, focus on thorough research, accurate and impartial content. We adhere to strict procurement standards and each page is diligently evaluated by our top technical experts and experienced editorial team. This process ensures the integrity, relevance and value of our content to our readers.
