India Targets 700 Tax-Free Crypto Investors: Report

India Targets 700 Tax-Free Crypto Investors: Report

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2022-03-21 04:56:15

The Income Tax Department of India reportedly identified around 700 crypto investors who failed to pay taxes on high value crypto transactions. “We have a long list of people who have traded crypto assets but have not paid taxes,” said an official with the country’s Central Direct Tax Commission.

Indian Tax Authority Hunts 700 Crypto Investors

The Income Tax Department of India is reportedly preventing non-payment of tax on crypto gains. The department is examining the high-value crypto transactions of about 700 investors, the Economic Times reported on Tuesday, adding that the authorities are proposing to issue a notice to them.

Income tax officials said most of these people either omitted to declare crypto gains on their tax returns or didn’t file them at all. They can face 30% taxes, penalties and interest.

A senior official of the Central Board of Direct Taxes of India (CBDT) told the publication:

We have a long list of people who have traded crypto assets but have not paid taxes. Initially, (we) listed about 700 transactions, in which the tax liability was very high.

The list includes high net worth individuals, non-resident Indians, startups, students and housewives. Some of them have never filed a tax return.

According to tax officials, some people have income in excess of Rs 40 lakh but fail to file tax or declare zero income on their returns. Furthermore, taxpayers treated crypto transactions differently on their tax returns – some declared 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 crypto capital gains for the next financial year. The budget adds that the flat tax will apply regardless of how long an individual has held crypto assets.

Besides complying with the tax rules outlined in the budget, tax officials said the department may also seek penalties, which can be as much as 50% above and beyond the tax rate.

In an interview with the publication last month, CBDT President JB Mohapatra said that a large number of crypto investors have failed to declare their income and that the income tax department has collected enough data on them. He added that the department will begin enforcement action after March 31.

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