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Income Tax Implications for Non disclosure of Digital Assets India 2021

Non disclosure of any type of Income and Assets could have serious repercussions. Lets see what would be the Income Tax Implications for Non disclosure of Digital Assets India 2021. Many Cryptocurrency Traders and Investors are unaware that they need to disclose their holdings in their income tax return. 

They are liable to furnish the details of assets and liabilities as on 31st March under the AL(Assets and Liabilities)  schedule of ITR. So assets disposed off during the year are not required to be disclosed in that schedule but will become part of Capital Gains Statement. You are required to disclose the particulars of all immovable properties and movable property. This includes your digital assets such as NFTs, Cryptocurrency, Bitcoin, Dodge Coin, Ethereum, etc. 

In case you are  partner of a firm or member of an association, the particulars of your interest in the firm or association needs to be disclosed with PAN of the entity.

 

People who are required to fill this schedule will have to report the following details:

  1. Immovable Property- Cost of Land and Building owned.
  2. Movable Property- Cash in hand, cost of Jewellery, bullion, aircraft, vehicles, yachts, boats, digital assets, etc
  3. In case of ITR 3 & ITR 4-  Additional details regarding deposits or investments made in banks, investment in shares, securities & crypto, loans and advances given, insurance policies, cost of archaeological collections, drawings, paintings, etc. are to be provided.
  4. Liability (loans) in relations to the abovementioned assets, investments.

How the amounts of assets and liabilities are to be filled-in?

Taxpayer is required to enter the COST of the assets mentioned.

  1. Enter total cost of all the lands (in the form of plots, agricultural land etc.) owned by you.
  2. Enter total cost of all the buildings (in the form of Flats, Bungalows, shops etc.) owned by you.
  3. Enter total amount of Fixed Deposits, Recurring Deposits and Saving/Current Account Balances with all Banks.
  4. Enter the total Cost of Shares, debentures, bonds, mutual funds units, Cryptocurrency, NFT etc. held by you.
  5. Enter the total amount of Insurance Premiums paid by you for insurance policies that did not mature on 31st March {Financial Year end}.
  6. Enter the total amount of Loans and Advances given to friends / Relatives / others.
  7. Enter the total amount of Cash in hand held as on 31st March {Financial year end}
  8. Enter the Total Cost of Jewellery made of gold, silver, platinum or any other precious metal. Also include cost of Precious or Semi-Precious Stones owned by you.
  9. Enter the Total Cost of Archaeological collections, drawings, painting, sculpture, antiques or any work of art purchased by you.
  10. Enter the Total Cost of vehicles, yachts, boats and aircrafts owned by you.
  11. Enter the amount of loans/liabilities borrowed to purchase the above mentioned Assets.

Do remember the following points while filling Schedule AL:

  1. The assets mentioned will not include personal accessories i.e. wearing apparel, furniture held for personal use by the taxpayer or dependent any family member.
  2. Taxpayer is required to mention the total amount of COST of the assets mentioned including digital assets. However, where such assets are acquired by taxpayer by way of gift, will or inheritance; then Cost will be the Cost incurred by previous owner as increased by amount, if any incurred by taxpayer, for improvement.

If interested, we offer Crypto Tax Advisory services wherein we can guide you right way to file income tax return for your crypto transactions. First step would be schedule a consultation with a CA. All consultations with the CA are Paid consultations.

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