Indian authorities recently identified about 700 cryptocurrency investors for refusing to pay taxes on robust gains. The income tax department in the country claims the identified investors failed to effect tax payments on high-value crypto transactions. According to an official of the country’s central board of direct taxation, the department currently discovers a long list of persons, making crypto-oriented transactions, but not paying taxes.
Accordingly, the income tax department reiterates commitment to tracking down all tax defilements, especially on cryptocurrency gains. In a report, the department is evaluating the high-value crypto transactions of 700 investors. The report further confirmed the decision of the Indian authorities to consider the issuance of notices to the involved investors.
Furthermore, the officials associated with the income tax office disclosed that most of the identified persons omitted to announce crypto profits on their tax returns or decided not to affect tax returns at all. This, however, prone them face 30% tax, penalty, and interest. An official at the Indian Central Board of Direct Taxation stressed that the board shortlisted transactions with high tax liability. According to him, the list entails high net worth persons, students, startups, non-resident Indians, and housewives. The official told the publication that some of the shortlisted investors have never filed tax returns.
In addition, tax personnel asserted that several persons gained over Rs 40 lakh, but chose not to file tax returns. The said persons also failed to declare zero income on their returns. More so, taxpayers reportedly treat crypto transactions uniquely on their tax returns. While few persons declared theirs as capital gains, others revealed their income as business income.
The newly proposed crypto tax laws by Indian authorities
The Indian Finance Minister, Nirmala Sitharaman, recently in her budget recommended a 30% tax on all capital profits from cryptocurrencies. The minister during her presentation proposed the execution of the new tax rule from the next fiscal year. In the budget, a flat tax becomes applicable irrespective of the duration of crypto assets in the confines of investors.
Aside from adhering to the tax rules highlighted in the budget, tax personnel says the department remains committed to seeking tax penalties. According to them, the penalties could rise to 50% over and above the tax.
The CBDT chairman, J.B Mobapatra in an interview with the publication last month announced that the department already collated the data of culpable investors. He, however, reinstates the commitment of the department in instigating enforcement action after March 31.
A national tax expert, Sudhir Kapadia said the problem with crypto transactions manifests when crypto gain or loss gets mentioned in tax returns. He further that with the new tax administration, crypto transactions tends to attract tax when authorities realize any unaccounted transaction after April 1.