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Key Points

Indian tax authorities have detected Rs 630 crore in undisclosed cryptocurrency transactions over two financial years. The government introduced specific crypto taxation rules in FY 2022-23 under section 115BBH. CBDT has launched the NUDGE campaign to alert crypto traders about proper tax reporting. Advanced data tools are being used to match crypto transactions with tax filings.

Key Points: Rs 630 crore undisclosed crypto income detected in 2 years

  • CBDT found Rs 630 crore in unreported crypto income
  • New 115BBH tax rule applied since FY 2022-23
  • NUDGE campaign sent 44,057 alerts to VDA traders
  • Data analytics tools track crypto tax compliance
2 min read

Rs 630 crore detected in undisclosed income via crypto transactions in 2 fiscals: Govt

CBDT uncovers Rs 630 crore in hidden crypto income during FY 2022-23 and 2023-24, with Rs 705 crore tax collected from VDA transactions.

"Undisclosed income detected in VDA transactions amounts to approximately Rs 630 crore - Pankaj Chaudhary, MoS Finance"

New Delhi, Aug 5

The Central Board of Direct Taxes (CBDT) detected approximately Rs 630 crore in undisclosed income in virtual digital asset (VDA) transactions amounts in just two financial years, the Parliament was informed on Tuesday.

The tax on income from transfer of VDA, under section 115BBH of the Income Tax Act, 1961, was introduced from FY 2022-23.

“The total amount of tax offered by the taxpayers for FY 2022-23 and FY 2023-24 was equal to Rs 705 crore. Further, during search and seizure operations and survey operations, undisclosed income detected in VDA transactions amounts to approximately Rs 630 crore,” Minister of State for Finance, Pankaj Chaudhary, said in a written reply to a question in the Rajya Sabha.

Cases of tax evasion linked to investments in cryptocurrency and Virtual Digital Assets (VDAs) have been detected by the Central Board of Direct Taxes (CBDT) on multiple occasions over a period of time and necessary action as per Income Tax Act,1961 is taken by the Income Tax Department in such cases.

According to the minister, to create awareness among taxpayers regarding the disclosure of VDA and payment of tax, CBDT has recently launched NUDGE (Non-Intrusive Usage of Data to Guide and Enable) taxpayers’ campaign, under which 44,057 emails and messages have been sent to select taxpayers who had invested and traded in the VDAs but did not report the transactions in Schedule VDA of their Income Tax Returns (ITRs).

The CBDT has undertaken various initiatives to ensure accurate reporting and taxation of income from cryptocurrency transactions. These include the use of data analytics tools such as the Non-Filer Monitoring System (NMS), Project Insight, and internal databases of the Income Tax Department to correlate available information on Virtual Digital Asset (VDA) transactions with the disclosures made in taxpayers' Income Tax Returns (ITRs).

TDS returns filed by Virtual Asset Service Providers (VASPs) and ITRs filed by taxpayers are also analysed to identify discrepancies in reported VDA transactions and appropriate action is taken, said the minister.

- IANS

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Reader Comments

S
Sarah B
While I appreciate the tax department's efforts, I wish they made the reporting process simpler. The Schedule VDA in ITR is quite confusing for first-time crypto investors. Maybe they should conduct workshops instead of just sending emails?
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Ananya R
Rs 630 crore is massive! But I wonder how much more is still hidden. Crypto trading is so opaque in India. My cousin made lakhs in Bitcoin but never declared anything. Government needs better tracking mechanisms for these digital assets.
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Karthik V
The NUDGE campaign is a good start but 44,000 emails is nothing compared to actual crypto users in India. Most small traders don't even know they need to pay 30% tax on crypto profits. Need more awareness campaigns on social media where these traders actually are!
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Michael C
As someone working in fintech, I think the 30% flat tax on crypto is too harsh. It's discouraging legitimate investors while the real tax evaders will just find ways around it. The government should reconsider this slab to encourage more transparent reporting.
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Priya S
Good job CBDT! 👏 But what about the exchanges? Many Indian crypto platforms don't even send proper tax statements to users. They should be held equally responsible for enabling tax evasion. Strict KYC and transaction reporting should be mandatory for all exchanges.

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