Alert! Income Tax Department To Issue Notices To 700 Crypto Investors, Could Levy Penalty, 30% Tax & Interest

Nearly a month and a half after India’s Finance Minister announced tax on crypto during Budget 2022, the IncomeT ax department seems set to issue notices to about 700 investors involved in high-value crypto transactions, as per ET report. 

These 700 investors have come under the scanner of the income tax department, which is now proposing to issue notices to them. These individuals or entities could face 30% tax, penalty and interest, as per the report.

What The Officials Said

Officials added that there are instances where gains have exceeded ₹40 lakh, yet the user has either not filed returns or filed returns with zero income.

In an interview to ET last month, CBDT chairman JB Mohapatra had said that a large number of investors in crypto currency had not been declaring income and the income tax department has collected enough data on them. He had maintained that the department will initiate action after March 31.

Tax officials said that apart from imposing levies under the new rules for crypto assets, the department may also seek penalties, which may go up to 50% over and above the tax.

Income tax officials reportedly said that most of these cases involved users who have either skipped mention of crypto gains in tax returns or haven’t filed returns at all.

A senior Central Board of Direct Taxation (CBDT) official told ET “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.” 

List Also Includes Students & Housewives

Surprisingly, the list also includes students and housewives who have never filed returns, besides high net-worth individuals (HNIs), non-resident Indians (NRIs) and startups. The department is also examining whether students and housewives’ names had been used to evade the tax net, as per ET.