Quick Summary
Income Tax Notice is sent by the Income Tax Department to taxpayers informing about discrepancies or issues related to your tax filings. A Taxpayer while scrolling through his phone found that he received SMS from the tax department. What's in the Message? The message was relate to cryptoc
Daily Limit Reached
You have reached your daily limit of 2 Free Articles
Subscribe to CCI PRO for unlimited access
Why Upgrade to CCI PRO?
- No Ads
- WhatsApp Broadcasts
- Daily E-Newsletter
- Unlimited Articles Access
BEST VALUE
2 YEAR PLAN
3,499
(Inclusive of GST)
1 YEAR PLAN
1,999
(Inclusive of GST)
Buy CCI PRO Now
Already a PRO member? Login here for an ad-free experience.
You might receive this notice if the Income Tax Department has observed transactions in virtual digital assets where 1% TDS was deducted, but these transactions have not been declared in your Income Tax Return (ITR).
The SMS alert is a reminder from the IT Department about discrepancies in your tax filings, specifically that crypto transactions with TDS deducted were not declared in your ITR. It's an opportunity to correct your return.
If you sell crypto and provide your PAN, 1% TDS is deducted by the buyer. For example, selling Bitcoin worth £1,50,000 would result in £1,48,500 received after tax. These sales must be declared in the 'VDA Schedule' of your ITR.
You generally have up to four years to correct an ITR. However, delaying this correction can lead to penalties ranging from 25% to 70% of the tax due.
Ignoring an income tax notice can lead to penalties, such as a Rs 10,000 fine for non-compliance with certain notices, and potentially prosecution. For undeclared crypto TDS, penalties can be substantial if not rectified.
CAclubindia
