CBDT emails thousands of taxpayers urging them to review and update ITRs for under-reported crypto income as part of a NUDGE campaign targeting VDA discrepancies
The Central Board of Direct Taxes (CBDT) has sent emails to thousands of individuals who may have under-reported income from crypto transactions, asking them to review and update their income tax returns (ITRs), according to CBDT sources.
“The department has recently sent emails to thousands of defaulting persons to review their ITR and update it if any income on account of VDA (virtual digital asset) transactions has not been properly declared. Those who fail to respond to the nudge may be picked for verification or scrutiny,” an official said.
The move is part of CBDT’s latest NUDGE (Non-intrusive Usage of Data to Guide and Enable) campaign targeting tax evasion through VDAs such as cryptocurrencies.
“Using data analytics, the tax department has flagged cases where taxpayers either failed to file the mandatory Schedule VDA in their ITR or declared such income incorrectly by claiming lower tax rates or disallowed deductions such as indexation,” the source said.
According to CBDT sources, the department is also matching income tax returns with tax deducted at source (TDS) returns filed by Virtual Asset Service Providers (VASPs), such as crypto exchanges, to identify discrepancies.
Income from the transfer of VDAs is taxable at a flat 30 per cent under Section 115BBH of the Income Tax Act, 1961, without any deductions except cost of acquisition. Losses from such transactions cannot be set off or carried forward.
This is the third NUDGE campaign by the CBDT in the past six months under its “TRUST — Taxpayers First” initiative. Previous drives focused on non-disclosure of foreign assets and bogus deductions under Section 80GGC.
The emails have been sent in relation to Assessment Years 2023–24 and 2024–25, based on discrepancies detected in crypto-related disclosures during these periods.
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