Crypto Taxation is a complex subject. While countries haven’t directly adopted or banned crypto, they’re slowly evaluating the route for incorporating these new technologies. However, The direct tax body of India has identified some crypto investors for failing to pay taxes on crypto transactions.
The income tax department of India is cracking down on non-payment of taxes from crypto gains. According to the Economic Times, the department is examining high-value crypto transactions of about 700 investors.
Income tax officials state that people have either omitted declaring crypto gains on their tax returns or haven’t filed tax returns. Moreover, due to this, they could face 30% tax, penalty, and interest.
A senior official from the Indian Central Board of Direct Taxation (CBDT) talked about this, saying:
“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 has names of high-net-worth individuals, non-resident Indians, startups, students, and housewives. As a matter of fact, some of them haven’t filed tax returns ever.
Moreover, according to tax officials, some people have gains of more than Rs 40 lakh but haven’t filed tax returns yet. In fact, they’ve declared zero income on their returns.
The department also believes that taxpayers are treating crypto transactions differently than their tax returns. For example, some have declared their income as capital gains. On the other hand, some have declared it as a business income.
According to the tax rules outlined in the latest financial budget, tax officials can seek penalties, which may go up to 50% over and above the tax.