ITR filing: How to report crypto income in income tax return after addition of new VDA schedule?
ITR filing: The Income Tax Department has added news schedule in Income Tax Return (ITR) form for the the assessment year 2023-24. This new schedule aims to help investors report their income from virtual assets. The name of this new schedule is Virtual Digital Assets (VDA).
It will help crypto currency investors to report crypto income while filing the ITR for AY24. According to tax and investment experts, the Government of India (GoI) has levied 30 per cent flat tax on income from virtual assets. They maintained that a virtual asset investor needs to maintian separate record for separate assets because income tax rules on virtual assets don't allow setoff benefits.
Speaking on the income tax rules relating to crypto income, Pankaj Mathpal, MD & CEO at Optima Money Managers said, "A crypto investor needs to maintain separate records for separate currencies. As per the income tax rules, an income tax payee can't claim setoff benefit on losses incurred on its investments in virtual assets. So, an investor will have to pay 30 per cent tax on its income from the select crypto currencies without dedcuting the loss incurred on other assets." On how to calculate income from crypto and other virtual assets, Pankaj Mathpal explained, "Suppose you earned ₹100 from select crypto currency investments and lost ₹80 on other crypto investments.
Then you will have to pay 30 per cent of ₹100 earned on select crypto currencies. In case of other assets like stocks, an investor has to pay income tax on ₹20 ( ₹100 - ₹80) claiming setoff benefit." Apart from this income tax calculation rule, there are some other precautions that an income tax payee should be vigilant about. VDA schedule On how to report crypto income after addition of VDA
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