'I-T returns for next year to have separate column for income from crypto'

New Delhi: Income tax return forms from next year will have a separate column for making disclosures on gains made from cryptocurrencies and paying taxes, top government official said. The government will from April 1 charge a 30 per cent tax plus cess and surcharges, on such transactions in the same manner as it treats winnings from horse races or other speculative transactions.

Revenue Secretary Tarun Bajaj said on Wednesday said gains from cryptocurrencies were always taxable and what the Budget proposed is not a new tax but providing certainty over the issue.

"The provision in the Finance Bill is related to taxation of virtual digital assets. It is to bring certainty in taxation of cryptocurrencies. It does not convey anything on its legality which would come out once the Bill (on regulating such assets) is introduced in Parliament," he said. The government is working on legislation to regulate cryptocurrencies, but no draft has yet been released publicly.

In the meanwhile, a central bank-backed digital currency will start circulating in the next fiscal to usher in cheaper, more efficient currency management.

The 30 per cent plus applicable cesses and surcharge of 15 per cent on income above Rs 50 lakh will have to be paid on income from cryptocurrencies, he said adding the income tax return form from next year will have a separate column to declare gains from crypto. "Next year ITR form will show a separate column for crypto. Yes, you will have to disclose," he said.

The launch of 'Digital Rupee' by RBI as well as a 30 per cent tax from April 1 on profits from digital asset transactions, including cryptocurrencies and non-fungible tokens (NFTs) was announced by Finance Minister Nirmala Sitharaman in her budget speech on Tuesday.

Moreover, the two-year window provided to taxpayers to disclose omitted income and correct mistakes made in income tax returns, is not an amnesty scheme, Revenue Secretary Tarun Bajaj said on Wednesday emphasising that an additional 25 per cent tax will have to be paid on income that wasn't previously disclosed.

The scheme, proposed in the Union Budget presented on February 1, recognises that taxpayers may have for genuine reasons missed out on declaring an income and the window gives them a chance to amend their returns, Bajaj said. The window will be a permanent feature, allowing taxpayers to correct any discrepancy or omissions in their ITRs within two years of filing, subject to payment of taxes.

An additional 25 per cent on the due tax and interest would have to be paid, if the updated ITR is filed within 12 months, while the rate will go up to 50 per cent, if it is filed after 12 months, but before 24 months from end of relevant Assessment Year. How this works is, if someone forgets to show an income of Rs 50,000 and the tax on it is Rs 15,000. Then he/she will have to pay 25 per cent or 50 per cent extra tax (depending on when the updated return is filed) on the Rs 15,000.