Yes. The Finance Act, 2025 inserted the words ', virtual digital asset' into the definition of undisclosed income in s.158B(b) after 'money, bullion, jewellery' at both places where they occur, with effect from 1 February 2025, so undisclosed crypto found in a search initiated on or after 1 September 2024 falls into the block period and is charged at 60% under s.113. No decision on VDA in a block assessment was found.
The amendment is small and decisive. Section 158B(b) defines undisclosed income for Chapter XIV-B as including 'any money, bullion, jewellery or other valuable article or thing or any income based on any entry in the books of account or other documents or transactions' which represents income or property not disclosed for the purposes of the Act. The Finance Act, 2025 directed that 'after the words "money, bullion, jewellery" at both the places where they occur, the words ", virtual digital asset" shall be inserted', with effect from 1 February 2025. Before that the department had to bring crypto in through 'other valuable article or thing' or through an entry in documents; now it is named.
The consequences are the ordinary Chapter XIV-B consequences, which the library covers separately. The block period is the previous years relevant to ten assessment years preceding the year of the search, plus the part of the search year up to the date of the search. Section 113 charges the total undisclosed income of the block period 'at the rate of sixty per cent'. That is the practical significance of the amendment: crypto that would otherwise have been assessed year by year, with s.69A and the 60% rate in s.115BBE as the department's route, now sits inside a single block computation for up to ten years.
What the officers can actually do with a wallet is a separate question, and it is where the machinery is thinnest. A crypto-asset cannot be physically seized; control passes with the private key or with the exchange's cooperation. The Income-tax Act, 2025, which governs searches from 1 April 2026, addresses the access side rather than the custody side: s.247 permits an authorised officer to 'override the access code to any computer system', and s.261(j) defines 'virtual digital space' as 'a non-physical space created and accessed through computers where people interact, and perform activities through computer systems, communication devices, cyberspace, the World Wide Web, storage or exchange of electronic information', which is described as covering online investment accounts, cloud and email servers and similar platforms. No rule or instruction was found prescribing how a seized crypto-asset is to be held, valued or released, and s.132B's machinery for the release of seized assets was written for physical assets and money.
Outside a search the position is unchanged and worth keeping distinct. Crypto credited to an undisclosed exchange account, or acquired out of unexplained funds, is assessed under s.69A as unexplained money or under s.68 where it passes through books, and s.115BBE charges it at 60% with no deduction and no set-off, with the s.271AAC penalty riding on it. A block assessment displaces that route for the block period; it does not add to it.
Two timing points. First, the block regime applies to searches initiated on or after 1 September 2024; for earlier searches the s.153A and s.153C scheme governs and the s.158B amendment does not reach them. Second, an updated return under s.139(8A) is not available once a search or survey has begun, so the voluntary correction window that answers an ordinary AIS mismatch is closed in these cases from the day of the search.
What should be expected next is the data. Section 285BAA reporting by crypto-asset service providers begins from 1 April 2026, which will give the department an independent record of holdings and disposals on Indian platforms. The realistic assumption for a search file opened after that date is that the department already has the exchange-side ledger and is testing the assessee's explanation against it.
It removes the argument that crypto is not the kind of thing Chapter XIV-B was written for, and it changes the arithmetic: ten years in one computation at 60% rather than a single year's s.69A addition. It also changes what has to be preserved on the day of the search — wallet addresses, exchange statements and the acquisition trail, because the assessee's own record is the only thing that separates a disclosed holding from an undisclosed one.
I paid advance tax for the year but had not filed my return when the search took place. Can the department still call that income undisclosed?
Cash seized in a search was appropriated against a tax liability that the Tribunal later knocked out. The Department has paid me interest from the date of the assessment to the date of refund. Am I entitled to anything for the years before the assessment?
Valuables were found at my premises and I say they are not mine. Who has to prove ownership?
When must the satisfaction note be recorded before proceedings are taken against a third party?
A fixed deposit stands in the name of a partner's son and my firm used it as security for its overdraft. The Assessing Officer says the money is really the firm's concealed income. Who has to prove what?
A search was made on someone else and my papers were found. From which date are my six years counted - the search, or when my Assessing Officer got the papers?
The company and I have a mutual, open and current account with money moving both ways. Is the deemed dividend the closing debit balance, the highest debit balance during the year, or something else? And can the Department tax money that reached me through a firm rather than directly?
The seized documents say nothing about the years being assessed. Can s.153C still be used for them?
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