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.
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