According to reports, India’s income tax (IT) department is tightening up on non-payment of taxes on cryptocurrency earnings. The department is investigating the high-value crypto transactions of around 700 investors, and the government is planning to send summons to them. Income tax officials remarked that the majority of these folks either failed to declare their crypto earnings on their tax filings or did not submit tax returns at all. They could face a 30% tax, penalty, and interest.
According to a senior official of the Indian Central Board of Direct Taxation (CBDT), there is a huge list of people who are trading in cryptocurrency but are not paying taxes. We have identified around 700 transactions with a substantial tax liability. The list consists of some of the high profile people, non-resident Indians, entrepreneurs, students, and housewives, some of whom have never submitted a tax return.
According to tax officials, some people have gains in excess of Rs 40 lakh but have either not filed tax returns or have stated zero income on their filings. Furthermore, people have been characterised differently on their tax forms, with some claiming revenue as capital gains and others declaring income as business income.
In her budget speech last month, Indian Finance Minister Nirmala Sitharaman proposed a 30% tax on capital gains from cryptocurrencies for the coming fiscal year. The budget also stated that a flat tax would be levied regardless of how long an individual has held crypto assets. In addition to adhering to the budgeted tax standards, tax authorities stated that the department may pursue fines of up to 50% above and beyond the tax.
CBDT Chairman J. B. Mohapatra told the magazine last month that a large number of cryptocurrency investors had not been declaring income and that the income tax agency had gathered adequate data on them. He went on to say that the agency will take enforcement action after March 31.