Unaccounted Crypto Transactions of 700 Investors under I-T Scanner

High-value crypto transactions of about 700 investors have-tax income-tax department, which is now proposing to issue notices to them. These individuals or entities could face 30% tax, penalty and interest. Income-tax officials said most of these cases involved users who have either skipped mention of crypto gins in tax return or haven ‘t filed returns at all.

“We have a long list of people transacting in crypto assets but were not paying tax. Initially, (we) have shortlisted about 700 transactions, where tax liability is very high,” a senior Central Board of Direct Taxation (CBDT)official told Et.

Interestingly, apart from high net-worth individuals (HNIs), non-resident Individuals (NRIs), and startups, the list also includes students and housewives who have never filed returns. The department is also examining whether their names had been used to evade the tax net.

In her February 1 budget, finance minister Nirmala Sitaraman proposed a 30% tax on capital gains from crypto currencies, crypto assets from the next fiscal year. The budget future stated that a flat TX would apply irrespective of how long an individual has possessed the virtual digital asset.

Officials said there are instances where gains exceeded 40 Lakh, yet the use has either not filled returns or filed returns to ET last month CBDT chairman JB Mohapatra had said that a large number of investor tax department has collected enough data on them. He had maintained that the department will initiate action after March 31.

Tax officials’ levies under the new rules for crypto assets as announced may also seek penalties, which may go up to 50% over and above the tax.

Divergent practices have been followed for crypto transactions, with some declaring income as capital gains, other as business income. S-ET

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