Earning from Crypto, now on the radar of Income Tax Department, will have to pay the account of unaccounted income

By Cross Talk India Team On Jun 14, 2025

The Central Board of Direct Taxes (CBDT) is investigating for the year 2023 24 and 2024 25 by individuals earning high income through investment in Crypto currency (virtual currency). CBDT sources said here that such institutions and individuals who are engaged in virtual digital asset (VDA) transactions and failed to comply with the Income Tax Act, 1961 have been identified for verification.

Section 115 BH of the Income Tax Act, 1961 under Finance Act, 2022, is under the tax rate applied with 30 percent on income from VDA transfer and tax at tax rate. The provision is not allowed to deduct any expenditure except the cost of acquisition.

In addition, the damage caused by VDA investment or trading is not allowed to be set-off against any other income or to be taken forward in later years. According to sources, data analytics have shown that a large number of individuals have violated the provisions of the Income Tax Act by not filing the Schedule VDA of ITR and by offering tax on income earned at a lower rate or claiming the cost index.

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He said that the ITR filed by taxpayers is being verified with TDS returns filed by Virtual Asset Service Providers (VASP), known as the Crypto Exchange and the defaulters can be selected for further verification/check.

Reliable sources have shown that CBDT has recently sent emails to thousands of defaulter individuals to review their ITRs and update any income due to VDA transactions.

CBDT has recently launched a new approach called cash (guide and non-gusable use of data to enable taxpayers as a part of Trust Taxpayers First philosophy. This campaign is considered to be the third cash campaign launched by CBDT in the last six months. Earlier, cash campaign was on the announcement of foreign property/income by taxpayers and withdrawal of fake claims of deduction under Section 80 GGC. Input agencies edited by: Sudhir Sharma