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Jun 21, 2025
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Didn’t report your crypto earnings? Income tax dept sending tax notices, conducting search & seizure for undisclosed income; know your options
The Income Tax department has sent bulk emails to numerous taxpayers who either haven’t paid the correct income tax on their cryptocurrency dealings or have failed to report their cryptocurrency transactions in Schedule VDA (virtual digital assets) of the Income Tax Return (ITR). [1] [2]
Keep in mind that if you are using foreign crypto exchanges like Binance or others, then you need to file Schedule FA in addition to the VDA schedule in the ITR. Overlooking any of these requirements, could get you into trouble with the tax authorities.
It's true that in the past similar bulk emails and notifications were sent out regarding unreported incomes, but this time things are different. The income tax department now has access to information and data about undisclosed crypto income even if the crypto transactions did not go through any Indian exchanges. Multiple experts told ET Wealth Online that their clients received this notice and in some instances, the tax department even conducted search and seizure operations and confiscated hardware-based crypto wallets.
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