Section 509 — Obligation to furnish information on transaction of crypto-asset. Successor to s.285BAA of the 1961 Act.
Section 509 is in Chapter XXIII — Miscellaneous, which runs from section 499 to section 536.
Sub-section (1) imposes the obligation: a person being a reporting entity, as may be prescribed, in respect of a crypto-asset, must furnish information in respect of a transaction of such crypto-asset in a statement — for such period, within such time, in such form and manner and to such income-tax authority as may be prescribed.
Sub-section (2) deals with a defective statement: where the prescribed income-tax authority considers the statement defective, he may intimate the defect and give an opportunity to rectify it within thirty days from the date of the intimation, or such further period as may be allowed; if it is not rectified within that period, the provisions of the Act apply as if the person had furnished inaccurate information in the statement.
Sub-section (3) deals with non-filing: where a person required to furnish the statement has not done so within the specified time, the prescribed income-tax authority may serve a notice requiring him to furnish it within a period not exceeding thirty days from service, and he must furnish it within the time specified in the notice.
Sub-section (4) puts a continuing duty on the filer: having furnished a statement under sub-section (1) or in pursuance of a sub-section (3) notice, if he comes to know or discovers any inaccuracy in the information provided, he must within ten days inform the prescribed income-tax authority of the inaccuracy and furnish the correct information in the prescribed manner.
Sub-section (5) allows the Central Government to prescribe by rules the registration of the reporting persons with the prescribed income-tax authority, the nature of the information and the manner of maintaining it, and the due diligence to be carried out for identifying a crypto-asset user or owner. Sub-section (6) gives "crypto-asset" the meaning assigned in section 2(111)(d).
Crypto-asset transactions leave no bank trail the Department can call for in the ordinary way, so the Act places the reporting duty on the entity that handles them and adds a registration and due diligence framework so the user or owner behind a transaction can be identified. The deeming rule in sub-section (2) supplies the consequence that makes the statement worth filing properly.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Time to rectify a defective statement | Thirty days from the date of the intimation | Or such further period as may be allowed; failure to rectify within that period makes the Act apply as if inaccurate information had been furnished | Sub-section (2) |
| Time allowed by a notice for a statement not furnished | A period not exceeding thirty days from the date of service of the notice | A ceiling on what the notice may allow — the statement must be furnished within the time specified in the notice, which may be shorter | Sub-section (3) |
| Time to report a discovered inaccuracy | Ten days | From coming to know or discovering any inaccuracy in the information provided in a statement already furnished under sub-section (1) or in pursuance of a sub-section (3) notice | Sub-section (4) |
Almost every operative element here is prescribed rather than stated: who is a reporting entity, the period covered, the time, form and manner of the statement, the authority it goes to, the registration requirement, the nature of the information and the due diligence — all of it is in the rules, and the section supplies only the obligation and the consequences. Two consequences are worth separating. Under sub-section (2) an unrectified defect does not merely leave the statement defective; the Act then applies as if inaccurate information had been furnished, which is a different and worse position. Under sub-section (3) the notice may allow a period not exceeding thirty days — the thirty days is a ceiling, and the obligation is to file within the time the notice actually specifies. The ten-day duty in sub-section (4) runs from discovery, not from a notice, so it operates without anyone asking.
A prescribed reporting entity files its crypto-asset statement for a period, and the prescribed income-tax authority intimates a defect. The entity has thirty days from the intimation, or any further period allowed, to rectify it; if it does not, sub-section (2) makes the Act apply as if it had furnished inaccurate information. If, two months after filing, the entity itself discovers that a transaction was reported with the wrong value, sub-section (4) requires it to inform the authority and furnish the correct information within ten days of that discovery.
A reporting entity meets it in the prescribed statement it files, in an intimation of defect under sub-section (2), and in a notice under sub-section (3) requiring a missing statement. An ordinary person transacting in crypto-assets is not the filer, but the information reported about the transaction reaches the Department through this section.
the provisions of this Act shall apply as if such person had furnished inaccurate information in the statement
requiring him to furnish such statement within a period not exceeding thirty days from the date of service of such notice
he shall within ten days inform the prescribed income-tax authority, the inaccuracy in such statement and furnish the correct information in such manner as may be prescribed
See the full 1961 to 2025 concordance.
All of them are in the Rules 2026 index.
