Crypto tax notices: File revised return before assessment, update later

Once search or survey begins, even updated return may not be allowed

The Finance Ministry has flagged more than 44,000 taxpayers for failing to report virtual digital asset (VDA) transactions in their income-tax returns. If you have invested in cryptos, here is what you need to know to keep the taxman at bay.

 

Disclosure norms

 

Schedule VDA requires taxpayers to report every VDA transfer during the year, including the acquisition date, transfer date, tax head, cost of acquisition, sale consideration, and resulting income.

 

TDS–ITR mismatch triggers scrutiny

 

When VDAs are traded or sold through a registered virtual asset service provider (VASP), TDS under Section 194S of the Income-Tax Act, 1961, is reported