The Department of Revenue might ask the banks and crypto exchanges in reference to reporting the transactions that are made through virtual digital assets as the government is about to begin taxing gains through the cryptocurrencies and non-fungible tokens from the First of April. Once this is applied the sale and purchase that has been made through digital currencies will affect the Annual Information Statement (AIS).
The AIS will contain details of at least 46 financial transactions by any tax payer in a financial year. The move will be carried out to ensure that all the details related to virtual digital assets are available with the authorities for timely use and to ensure zero leakage of revenue or the revenues going unexamined. The department will deliberate on whether to make these transactions report under the specified financial transactions (SFTs). Making the VDA transactions a part of the Annual Information Statement will reduce the chances of mismatch of the informations received.
If a mismatch situation arises the taxpayers can report the department immediately, if one fails to do so the mismatch will be considered correct by the department and one might have to appear for explanation for the same. Tracking the VDAs in the AIS will help in examining them. The IT Department will collect the information about one’s incomes that they received and all the material transactions made by someone through various sources. Sources such as salaries, dividends, interest, from the savings accounts, bonds, recurring deposits, sales and purchase of equity shares. And mutual funds,etc. The statement will also include information in accordance to the tax deducted at source, tax collected at source, and any tax demand or refund.