Besides imposing the tax levies under the new crypto tax regime, the Income Tax Department may also seek penalties, which may go up to 50% over and above the tax.
Income Tax (IT) Department is increasingly nabbing tax evaders who are making use of crypto.
Big transactions of about 700 investors have been flagged by the IT Department, reported Economic Times.
The IT Department is now proposing to issue notices to them. These investors can face 30% tax, penalty, and interest.
“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,” a senior Central Board of Direct Taxation (CBDT)
The categories of investors identified are quite peculiar. Apart from high net-worth individuals (HNIs), non-resident Indians (NRIs) and startups, the list also includes students and housewives who have never filed returns. That’s why it is also being investigated if the names of these individuals are being used to evade taxes.
Officials also revealed that there are instances where gains have exceeded Rs 40 lakh. Still, the user has either not filed returns or filed returns with zero income.
Besides imposing the tax levies under the new tax regime, the department may also seek penalties, which may go up to 50% over and above the tax.
There are different ways to show income generated from crypto. Some show it as capital gains, others as business income.
Experts are of the opinion that it is not much of an issue. The real problem arises when there is no mention of crypto.
The new crypto tax regime seeks to simplify the process of paying taxes. It will bring uniformity in the tax returns and widen the tax net.
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