Hiding this income may entail 200% fine

If you have not yet filed ITR, then understand some things very well. Some changes have been made in the return of assessment year 2023-24. One of these changes is related to virtual digital assets including bitcoin. If you have also earned from crypto currency then you should know about this change. Apart from this, there are some other changes, which you should be aware of otherwise you may get into trouble.

Tax on Virtual Digital Assets
From April 1, 2022, special provisions have been made in the Income Tax Act to tax income related to Virtual Digital Asset (VDA) including crypto currencies. Further, under section 194S, in certain cases the buyer is required to deduct TDS of 1% before making payment for the purchase of crypto.  Schedule VDA has been added to the ITR form to disclose earnings from Virtual Digital Assets. Taxpayers in this will have to give details of earnings from crypto currency. Also, it has to be mentioned whether it is to be treated as business income or capital gain. If you hide this income and if you are caught, you will have to pay a fine of up to 200 percent.

If you have earned any income from crypto currency in the financial year 2022-23, then keep the necessary information with you to avoid any problem while filing the return. In the return, you have to include the date of acquisition of virtual digital asset i.e. date of purchase, transfer i.e. date of sale, the income earned from selling and what kind of income this is.

Check Form-26AS and AIS
Taxpayers should check their Form 26AS and Annual Information Statement (AIS) to include the TDS deducted in case of Virtual Digital Assets in the Income Tax Return. If you have income from virtual digital assets along with your salary then you cannot fill ITR-1. Instead you will have to fill ITR-2. Income from the sale of virtual digital assets like crypto, Non-Fungible Token (NFT) is taxed at 30 percent.

Changes related to donations and donations
The second change is related to donation. If you have given a donation on which tax exemption can be taken under section 80G, then only the receipt will not work. A new column has been added in the income tax form. In this column, the donation reference number will have to be given for the donation made to the institution, where 50 percent deduction is allowed subject to the qualifying limit. The donation reference number should be mentioned in Form 10BE or receipt issued by the organization receiving the donation.

Earnings from shares
The next change is for the stock market people. A separate column named ‘Trading Account’ has been added in the ITR form in which people have to give separate information about their intraday trading activities. In this, you have to report the turnover of intraday trading and the earnings from intraday trading. This column has been added in the ITR-3 form.

Tax regime option
A new questionnaire has been added inside ITR-3 and ITR-4, which is for those with business income. In this questionnaire, the taxpayer will have to tell whether he has opted for the new tax regime under section 115BAC in the previous years or has come out of this regime. This will help the tax authorities to know whether someone has used the new tax regime in the past. Individuals with business income can switch between tax regimes only once. That is, if they come from the old tax system to the new tax system, then they will get the chance to go back to the old tax system only once, while employed people can choose the tax regime every year.

If you are also going to file income tax return, then like Aditya, these changes can be useful for you. While filing returns, you have to take care of some other things. Like choose the right ITR form based on your income. Show the income under the correct head. After filling ITR, do not forget to verify it. Apart from salary, if there is any other income, then definitely report it in the return, otherwise you may have to pay a heavy penalty. Also there can be jail etrm.