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India’s income tax department has reportedly identified about 700 cryptocurrency investors who have failed to pay taxes on high-value crypto transactions. “We have a long list of people who were transacting in crypto assets but were not paying tax,” said an official with the country’s Central Board of Direct Taxation.
India’s income tax department is reportedly cracking down on non-payment of taxes from cryptocurrency gains. The department is examining the high-value crypto transactions of about 700 investors, the Economic Times reported Tuesday, adding that the authority is proposing to issue notices to them.
Income tax officials said most of these people have either omitted declaring crypto gains on their tax returns or have not filed tax returns at all. They could face 30% tax, penalty, and interest.
A senior official with the Indian Central Board of Direct Taxation (CBDT) told the publication:
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.
The list includes high net worth individuals, non-resident Indians, startups, students, and housewives. Some of them have never filed tax returns.
According to tax officials, some people have gains exceeding Rs 40 lakh but have either not filed tax returns or declared zero income on their returns. Moreover, taxpayers have been treating crypto transactions differently on their tax returns — some declaring income as capital gains while others as business income.
Indian Finance Minister Nirmala Sitharaman proposed in her budget speech last month a 30% tax on capital gains from cryptocurrencies for the next fiscal year. The budget further stated that a flat tax would apply irrespective of how long an individual has held the crypto assets.
Besides complying with the tax rules outlined in the budget, tax officials said that the department may also seek penalties, which may go up to 50% over and above the tax.
In an interview with the publication last month, CBDT Chairman J. B. Mohapatra said that a large number of cryptocurrency investors had not been declaring income and the income tax department has collected enough data on them. He added that the department will initiate enforcement action after March 31.
What do you think about India’s income tax department going after 700 crypto investors? Let us know in the comments section below.
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