The Central Board of Direct Taxes (CBDT) of India has launched an investigation into unaccounted crypto incomes among traders in the country, focusing on possible tax evasion and money laundering.
Start of CBDT Investigation
CBDT has stated that there is a likelihood that residents are laundering unaccounted income through digital assets, particularly with high-risk digital assets. The tax agency is currently investigating individuals and entities connected to potential violations of key provisions in the Income Tax Act of 1961.
Disclosure Issues with Income
According to officials, the investigations are majorly linked to individuals and firms that have either failed to disclose their digital asset income or incorrectly filed their tax returns. Under Section 115BBH of the Income Tax Act, income from transfers of virtual digital assets is taxed at a flat rate of 30%.
Possible Consequences for Taxpayers
In recent weeks, the Board has alerted thousands of individuals and firms it believes are involved, calling them 'high-risk defaulters.' CBDT is urging these individuals to review and, if necessary, update their income tax return information.
The CBDT's investigation reflects widespread non-compliance among taxpayers in the crypto sector and aims to promote transparency and adherence to tax obligations.
