Skip to content

CA Final · Direct Tax Laws & International Taxation · Taxation of Digital Transactions

During a search initiated on 10 August 2026 (tax year 2026-27), the last panchnama was drawn on 20 August 2026. The Authorised Officer found virtual digital assets held by Rohan which were not disclosed for the purposes of the Act. Which statement about the block period and undisclosed income is correct under the Income-tax Act, 2025?

The block period is the six tax years preceding the search year plus 1 April 2026 up to the conclusion of search recorded in the last panchnama, 20 August 2026. Undisclosed income expressly includes virtual digital assets representing income or property not disclosed for the Act.

  1. AThe block period covers the six preceding tax years plus 1 April 2026 up to 20 August 2026, and the virtual digital assets can be undisclosed incomeCorrect
  2. BThe block period covers only the tax year 2026-27, and virtual digital assets are excluded from undisclosed income
  3. CThe block period covers ten preceding tax years plus the period up to 10 August 2026
  4. DThe block period covers six preceding tax years plus the period up to 10 August 2026, the date of initiation

Explanation

Block period is the six tax years preceding the year of search plus the period from 1 April of the search year to the date of execution of the last authorisation. For a search, that is the conclusion recorded in the last panchnama, 20 August 2026. Undisclosed income expressly includes virtual digital assets. Ending at initiation date is the key error.

Did you get it right without looking?

One question tells you little. A timed set on Taxation of Digital Transactions shows your real accuracy, how long you take and where you lose marks.

Practise Taxation of Digital TransactionsFree diagnostic mock

More Taxation of Digital Transactions questions