The Indian government has recently uncovered nine crypto exchanges that have been found to be evading tax. These companies were investigated and reported on by the FSS because they allegedly did not follow the rules set in place for cryptocurrency trading platforms and their customers’ financial data was not being accurately transferred, which is required under law.
The issue with these statements comes when it’s revealed that some of the exchanges are associated with a specific political party or individual, which makes them potentially biased against foreign coins/tokens while favoring domestic ones as well as those affiliated with individuals or parties within their own country.
Investigations by the government have revealed that tax evasion of Rs 81.54 crore has been done by crypto platforms, with Rs 96 crore recovered in total, including interest and penalties. Investigations are ongoing to identify the rest of those involved in this activity and will provide more information as it is available.
There are 11 cryptocurrency exchanges in India, who have evaded taxes worth Rs 81.54 crore with a total of 96 crores having been recovered from them. The tax evasion by crypto platforms including WazirX, CoinDCX and CoinSwitch Kuber was identified by the GST investigation department as part of their investigation into unaccounted business transactions in the country.
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.
A taxation policy for trading in virtual digital assets (VDAs) was proposed by the government in the Budget 2022-23 around two months earlier.
Nirmala Sitharaman, the Union Finance Minister, announced that virtual digital asset transfers would be subject to 30% tax. Additionally, no deductions will be allowed in computing such income, except for acquisition costs.
In its report presented in parliament, Zanmai Labs, which uses the WazirX brand, revealed that it evaded Rs 40.5 crore. CoinDCX followed, evading Rs 15.70 crore, CoinSwitch Kuber, and Giottus Technologies followed.
Including interest and penalties, these exchanges returned Rs 17.10 crore and Rs 3.50 crore respectively.
Indian government has yet to release a draft of legislation to regulate cryptocurrencies as it has no formal policy on cryptocurrencies.
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