The Central Board of Direct Taxes (CBDT) has released the income tax return forms for the assessment year (AY) 2023-24. Even as there are not many changes in the income tax returns forms, there will be a separate schedule for reporting income from virtual digital assets (VDAs) such as cryptocurrency for Assessment Year 2023-24 (Financial Year 2022-23).
On February 10, the CBDT notified ITR forms 1-6, ITR-V (verification form), and ITR acknowledgment form for AY 2023-24.
As per the new schedule for virtual digital assets (VDAs) in the ITR forms, the taxpayer has to fill in details such as date of acquisition, date of transfer head under which income is to be taxed (capital gains), cost of acquisition (in case of gift); a) enter the amount on which tax is paid under section 56(2) if any
- b) In any other case cost to previous owner), income from transfer of virtual digital assets (enter nil in case of loss) for transfer of virtual digital assets.
Hence, those earning income or gains from VDAs need to have all these details at the time of filing ITR for Financial Year 2022-23.
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This separate schedule for VDAs has been introduced in the ITR forms after Budget 2022 proposed a new tax on income from virtual digital assets. The previous year's Budget imposed 30 per cent tax on income from the transfer of any virtual digital asset. No deduction in respect of any expenditure or allowance shall be allowed while computing such income, except the cost of acquisition, it added. Moreover, a person is liable for Tax Deduction at Source (TDS) at 1 per cent at the time of payment of the transfer of virtual digital assets. The Budget also proposed that the gifting of virtual digital assets will be taxed in the hands of the recipients.
Tax experts said the introduction of new schedule for VDA in the ITR forms was in line with the expectations. Saraswathi Kasturirangan, Partner Deloitte India told the Economic Times told separate ‘Schedule – VDA” has been added to report income from virtual digital asset such as crypto currency. “Tax provisions for taxation of VDAs was introduced from FY 2022-23 hence the addition of new schedule is in line with the expectation,’ he added.
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