The government has identified 11 cryptocurrency exchanges in India for tax evasions to the tune of Rs 81.54 crore. Around Rs 96 crore have been recovered from them, including interest and penalty. The tax evasion by crypto platforms including WazirX, Coin DCX and CoinSwitch Kuber was identified by the GST investigation department.
Minister of State for Finance Pankaj Chaudhary, in a written reply to the Lok Sabha on Monday, informed that action has been initiated action against exchanges. In his reply, Chaudhary also stated that the Centre did not collect any data on crypto exchanges.
This comes around 2 months after the government proposed a taxation policy for income from trading in virtual digital assets (VDAs), in the Budget 2022-23. Union Finance Minister Nirmala Sitharaman announced that income from the transfer of any virtual digital asset will be taxed at 30 per cent. Further, no deduction of any expenditure or allowance will be allowed while computing such income, except the cost of acquisition.
According to the data presented in the Parliament, Zanmai Labs, which operates as WazirX brand, evaded Rs 40.5 crore. Second on the list was Coin DCX, which evaded Rs 15.70 crore followed by CoinSwitch Kuber and Giottus Technologies. These exchanges paid back Rs 17.10 crore and Rs 3.50 crore respectively including interest and penalty.
With India having no formal policy regarding cryptocurrencies, the government is working on legislation to regulate them, however, a draft has not been released yet.
Meanwhile, on March 24, the government proposed to tighten the norms for taxation of cryptocurrencies by disallowing set off of any losses with gains from other virtual digital assets. As per the amendments to the Finance Bill, 2022, circulated among the Lok Sabha members, the ministry proposes to remove the word ‘other’ from section relating to set off losses from gains in virtual digital assets.
This would mean that loss from the transfer of virtual digital assets (VDA) will not be allowed to be set off against the income arising from the transfer of another VDA.
