Cracking Down on Crypto: The Income Tax Department's Latest Campaign

The Income Tax Department is stepping up efforts to ensure compliance among cryptocurrency traders, sending notices to thousands who reportedly did not disclose digital asset transactions in their returns. This initiative aims to address concerns over possible tax evasion and money laundering.

This action, covering assessment years 2023-24 and 2024-25, is part of the NUDGE campaign, underlining a 'trust taxpayers first' philosophy. The campaign focuses on guiding individuals to amend past omissions regarding forays into virtual digital assets (VDAs) and urging correctness in filing their tax returns.

Under Section 115BBH of the Income Tax Act, income from cryptocurrency transactions is subject to a 30% tax rate. The department is leveraging data analytics to pinpoint discrepancies and potential defaulters are being scrutinized, with efforts paralleling previous campaigns targeting foreign asset declarations and spurious tax deductions.

(With inputs from agencies.)