Quick Summary
In a significant step toward regulating cryptocurrency transactions and curbing tax evasion, the government has proposed to include Virtual Digital Assets (VDAs) within the definition of "undisclosed income" under the block assessment scheme. This change, part of the Finance Bill 2025, means that an
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FAQ :
Virtual Digital Assets (VDAs), including cryptocurrencies, are now classified as 'undisclosed income' under the block assessment scheme of the Income Tax Act.
This change will be effective from February 1, 2025.
Undisclosed crypto income found during tax searches could attract a flat 60% tax on the total undisclosed income, along with a 50% penalty on the assessed tax amount.
The block period covers the preceding six assessment years from the year in which the tax search was conducted.
Yes, reporting entities will be required to furnish transaction details involving crypto assets from April 1, 2026.
The definition of VDAs has been expanded to include any digital asset secured via cryptographic distributed ledger technology, applicable from assessment year 2026-27.
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