The Indian government is tightening its scrutiny on crypto investors through enhanced measures by the Income Tax Department. To combat tax evasion linked to virtual digital assets (VDAs), it utilizes AI, machine learning, and data analytics. Notably, ₹437 crore was collected in taxes from VDA income in FY 2022–23. Tax regulations for cryptocurrencies were established under Section 115BBH of the Income Tax Act, resulting in ₹269.09 crore from VDA transactions. The NUDGE campaign alerts individuals who fail to report crypto income adequately, especially when discrepancies exceed ₹1 lakh. Advanced systems like the Non-Filer Monitoring System (NMS) and “Project Insight” are in place to monitor compliance. Furthermore, tax officials are receiving training on blockchain analysis and digital forensics through collaboration with the National Forensic Science University. Penalties for misreporting or under-reporting can reach 200% of unpaid tax. Consequently, transparency in reporting crypto income is essential for investors to avoid severe repercussions.
Source link
Share
Read more