INVC NEWS
New Delhi — : The Crypto traders may land in serious trouble. The Income Tax Department has started sending notices to people who bought or sold cryptocurrency but didn’t report it in their tax returns. If tax on crypto earnings isn’t paid, a legal notice could reach your inbox anytime soon.
The government has clearly imposed 30% tax on all cryptocurrency income from 2022-23 under section 115BBH of the Income Tax Act. But many investors are still avoiding the rules, either by not reporting crypto profits or by giving false information in their Income Tax Returns (ITR).
Now, the Central Board of Direct Taxes (CBDT) and the Income Tax Department are taking this matter very seriously. As per reports, they’ve already sent thousands of emails to people who traded in virtual digital assets (VDAs) like Bitcoin, Ethereum, and others but didn’t include this income in ITR for assessment years 2023-24 and 2024-25.
Who is getting these crypto notices?
The CBDT is focusing on people who might be hiding black money or trying to use crypto as a way to escape taxes. Many of these users have not shown crypto profits in the correct schedule of ITR, or have paid less tax than required.
Authorities say the current action targets those who:
Did crypto transactions in the past two years
Didn’t mention crypto income in their ITR
Gave wrong or incomplete income information
Used unaccounted money to buy digital currencies
These people are now being told to file updated returns to avoid strict penalties.
How much tax do you need to pay on crypto income?
Anyone earning profit from cryptocurrency must pay:
30% flat tax rate (under section 115BBH)
Plus surcharge and cess as per income slab
No deductions allowed, except the cost of purchase
Crypto losses cannot be adjusted with any other income
This means if you earned ₹1 lakh in profit from crypto, you must pay ₹30,000 as tax, and also add cess and surcharge.
More than 10,000 defaulters found
Sources say that thousands of defaulters have already been identified through data analysis. Most of them either:
Didn’t report their crypto trades at all
Reported them in the wrong section
Paid tax at less than 30%
The Income Tax Department has collected strong data from crypto platforms, exchanges, and financial institutions. Based on this, they’re matching it with ITR filings to track defaulters quickly.
Crypto investors are advised to correct their returns now before stricter action begins. The Department is prepared to take legal steps against those who continue to hide crypto income.
