A 200% fine could result from hiding this income.
A 200% fine could result from hiding this income.
If you have not yet filed your ITR, it is imperative that you have a solid understanding of the following. In the return for the assessment year 2023-24, there have been several modifications made. One of these shifts is associated with virtual digital assets like bitcoin and other cryptocurrencies. If you have also made money through crypto currency, then you are required to be aware of this shift. Aside from this, there have been some other adjustments made, all of which you need to be aware of in order to avoid getting into any difficulty.
Tax on Virtual Digital Assets
Income derived from Virtual Digital Assets (VDA), which includes cryptocurrencies, will be subject to specific rules for taxation beginning on April 1, 2022, as a result of amendments made to the Income Tax Act. Additionally, before making payment for the purchase of cryptocurrency, the buyer is required to withhold tax at a rate of 1%, as mandated by section 194S of the Internal Revenue Code.
A new section labelled “Schedule VDA” has been included in the ITR form for reporting income from virtual digital assets. Taxpayers in this jurisdiction will be required to provide specifics regarding their gains from crypto currency. Additionally, it must be specified whether the gain is to be regarded as income from a business or as a capital gain. If you try to conceal this income and you get found, you will be required to pay a fine that is anywhere from 100 to 200 percent of the amount you hid.
When completing your tax return for the fiscal year 2022-2023, you should make sure that you have all of the relevant information on hand in order to avoid any complications. This is especially important if you made any money from crypto currency during that time. You are required to mention the date of acquisition of the virtual digital asset, also known as the date of purchase, the date of transfer, also known as the date of sale, the amount of money generated from selling, as well as the type of income that was earned.
Check the Form-26AS as well as the AIS.
The TDS that was deducted in the case of virtual digital assets should be included in the taxpayer’s income tax return. Taxpayers should examine their Form 26AS and Annual Information Statement (AIS) to ensure this. If, in addition to your pay, you get income from virtual or digital assets, you will not be able to file Form ITR-1. You will be required to fill out form ITR-2 instead. The profit made from the sale of virtual digital assets such as cryptocurrency or non-fungible tokens (NFT) is subject to a tax rate of thirty percent.
Adaptations necessary due to changes in gifts and donations
The second alteration is one that concerns donations. If you have made a donation that qualifies for a tax exemption under section 80G but you just have the receipt, you will not be able to claim the deduction. On the form used to report income, there is now an additional column. It is required that the donation reference number be provided in this field for the contribution that was made to the organisation that is eligible for a deduction of fifty percent, provided that the qualifying limit has been met. In either the Form 10BE or the receipt that is produced by the organisation that is receiving the donation, the donation reference number should be indicated.
Shareholder profits and dividends
The next adjustment is for those involved in the stock market. On the ITR form, there is now a distinct field labelled “Trading Account,” and individuals are required to provide distinct information regarding their intraday trading activities in this column. You are required to record both the turnover of the intraday trade and the earnings from the intraday trading in this section. The ITR-3 form has been updated to include this new column.
Choice of taxation system
People who have income from businesses will need to fill out the new questionnaire that has been added to forms ITR-3 and ITR-4. The taxpayer will be required to indicate in this questionnaire whether or not he has opted out of the new tax system outlined in section 115BAC during the preceding years. If the taxpayer has opted out of this regime,
the questionnaire will be considered invalid. Because of this, the tax authorities will be able to determine whether or not an individual has utilised the new tax regime in the past.
Only one transition between tax regimes is permitted for individuals who have income from a business. That example, if they come from one tax system to another, such as the old tax system to the new tax system, then they will only have the opportunity to go back to the old tax system once, whereas employed people get to choose their tax regime on an annual basis.
These modifications might be helpful for you as well, just like they were for Aditya,
if you are planning to file an income tax return. In addition to submitting your tax returns, you will need to attend to a few additional matters. For example, selecting the appropriate ITR form based on your income. Please display the income under the appropriate heading.
After filling ITR, do not forget to verify it. If you have any other income except your wage, you need to make sure that you include it on your tax return. If you don’t, you could end up having to pay a significant fine. There is also the possibility of jail time.
