ITR
Crypto trades flagged by the department
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Facts
Transfers of crypto and other virtual digital assets attract 1% TDS, and the trades appear in AIS. Gains are taxed at a flat 30% with no deduction except cost, and losses cannot be set off.
Provisions and law
- Sec 115BBH, Income-tax Act 1961 (now Sec 194, Income-tax Act 2025)Income from transfer of virtual digital assets is taxed at 30%.
- Sec 194S, Income-tax Act 1961 (now Sec 393, Income-tax Act 2025)TDS at 1% on transfer of virtual digital assets.
- Sec 139(8A), Income-tax Act 1961 (now Sec 263(6), Income-tax Act 2025)Updated return within 48 months from the end of the assessment year, with additional tax.
Analysis
Download the exchange tax report for the year. Report each gain in Schedule VDA; a loss on one coin cannot reduce gain on another. Claim the 1% TDS shown in Form 26AS. If missed, file a revised or updated return and then respond.
Conclusion
- Get the tax statement from each exchange.
- Compute gains per transfer at cost basis.
- Report in Schedule VDA and claim TDS.
- File the fix and respond on the portal.
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