The Indian Income tax department revealed that the huge crypto transactions of about 700 investors have come under the scanner. If served notice, these individuals or institutions could face 30% tax, penalty and interest.
In Brief:
- The list of these suspicious 700 investors also names students and housewives who have never filed returns.
- There are cases where profits have exceeded Rs 40 lakh but users have either not filed returns or filed returns with zero income.
- After March 31, the department will initiate action on crypto investors who had not been declaring income, as per CBDT chairman.
Further, Income tax officials revealed most of these cases involved investors who have either haven’t mentioned crypto gains in tax returns or haven’t filed returns at all.
“We have a long list of people who were transacting in crypto assets but were not paying tax. Initially, (we) have shortlisted about 700 transactions, where tax liability is very high,” a senior Central Board of Direct Taxation (CBDT) official told ET.
As per reports, what is striking about this issue is that except for high net-worth individuals, non-resident Indians (NRIs) and startups, the list also names students and housewives who have never filed returns. One possible catch could be that their names had been used to evade the tax net; the department is examining this angle as well.
Citing the 30% tax on gains from cryptos, officials explained that there are cases where profits have exceeded Rs 40 lakh, yet the user has either not filed returns or filed returns with zero income.
CBDT chairman JB Mohapatra had revealed that after March 31 the department will initiate action on crypto investors who had not been declaring income.
Referring to the February budget, tax officials maintained that in addition to imposing taxes under the new guidelines for crypto assets, the department may also seek penalties, which may go up to 50% over and above the tax.
Sudhir Kapadia, national tax leader, EY commented, “I do not think there is a problem with crypto transactions where tax returns have been filed mentioning crypto gain or loss. But cryptocurrency transactions will attract tax as per the new tax regime if tax authorities detect any unaccounted transaction after April 1.”
Crypto crimes have been on rising for the past few days. On Monday, the ministry of finance in India revealed that the Enforcement Directorate is investigating at least seven cases under the Prevention of Money Laundering Act 2002 where offenders have resorted to crypto investments to launder money.
