P2P trader received tax notice for 78K INR for the profit of 1500INR

[Bitcoin Smith]

Recently crypto traders in India faced up to 78% tax penalties for P2P transactions without buyer KYC. In 2022 the trader sold cryptocurrencies worth 98,500 via peer-to-peer (P2P) transactions and booked a ₹1,500 profit on it. The transaction was done through a centralized exchange.

Now after approximately 3 years he got a a notice from the income tax department and asked him to pay a hefty tax penalty of Rs 78,000. The issue stems from traders’ inability to provide complete KYC details of their transaction counterparties. Without information like PAN cards of P2P buyers, tax authorities are treating entire deposits as undisclosed income subject to the maximum penalty rate.

Full article: Indian Crypto Trader Faced 78% Tax Penalties for P2P Transactions

Thanks to our FM, Nirmala Sitharaman for bringing new amendment under Section 158B of the Income Tax Act.

The platform used by the trader is not mentioned but I guess it's Binance p2p so who didn't pay their tax even for years are in the danger of receiving such penalty if you ever KYCed and our government managed to pull data from the platform once they are FIU registered.

But I don't understand the match here, it must be 30% of 1500 not the whole 98K but even if the whole 98K is considered as profit then 30% tax against it must be around 29K not 78K.

[TheUltraElite]

I think we Indians have to avoid any sort of CEX out there and we dont know DEX's and if they are going to cracked down at some point in the future.

This government does not like any sort of tax freebies from its middle class. As per the last line of the article, the tax people here want us to keep track of counter-parties - I mean we do their job now?

[Bitcoin Smith]

the tax people here want us to keep track of counter-parties - I mean we do their job now?

I am not sure understand that part either, because we are responsible to keep track of our data but how can they expect us to do the same for the people we trade with and then what is the point of 30% tax if they are not going to give any shit about the security of funds involved in it and the bank freezes then we should not be surprised when people doesn't want to pay any tax at all. And even with all these tight regulations people will keep finding ways to evade and avoid so it's better to have fair tax than no tax due to high tax.

[avikz]

This incident shows the pain of any crypto users from India. It also shows the regressive mentality of our government. India needs a thorough reform from the beaurocracy and century old tax codes. People rightly says - India taxes like Switzerland but provides facilities like Somalia. What a shame!

It's no wonder why financially capable people are always willing to leave the country at the first chance and are not willing to come back, ever. It's better to live elsewhere who embraces technology and advancements.

[LucyFurr]

Taxes on everything but what we get in return? Free health care? Better roads? None...

We are cursed to live in this era.

[JSRAW]

We are cursed to live in this era.

Our generation have different sets of challenges when compared to previous generation so IMO it's tough af but it would be exaggeration to call it cursed.

People are not dying in masses due to famine, no one has to wait for year to get a phone connection. 4-10 hours power cut used to be norm in delhi-NCR but now i dont remember when was the last time i experienced power cut. Similarly long lines for rations, sugar, kerosene, gas cylinders etc.

Hilly areas used to be cut for months from the rest of the world due to heavy icefall now thats not the case. Connectivity is much better, if the not the best.

And the list goes on and on.

[memehunter]

This is not government in action, but a shameless display of governmentality. I don't know how many other people also received this kind of notice, but clealry, government want to set some examples. In India, it is a crime to evade taxes, but the bigger crime is to think out of the box and have big dreams. Governments are afraid (across the world) of things they can’t control, and certainly, crypto is one of those things. This is exactly what is happening to crypto-based startups in India, they are all afraid and thus left behind. This government is especially in favour of heavy centralization of power.   

Recently crypto traders in India faced up to 78% tax penalties for P2P transactions

[TheUltraElite]

Taxes on everything but what we get in return? Free health care? Better roads? None...

You do get free health care. Its called a government hospital. But free comes with its costs as well. You cant expect level of care as private hospitals.

We are cursed to live in this era.

It is easy to think like that in the negative view of things. But certain developments have happened in the country, but a lot more are there which probably will never go away because the problem is in the root of the country.

What we need to do is survive in the best possible manner.

[Bitcoin Smith]

This government is especially in favour of heavy centralization of power.   

I would go further one step and say it's all bureaucrats who is making the moves because I bet none of the political leader has any idea of what is crypto, or even what is decentralization because they are not even school grads.

RBI is what operating these act, they just feed the taxes to the government but they know that enabling decentralization is a threat to their operation which is why RBI banned crypto trades later intervened by Supreme court to turn around the ban and since then they are just doing everything that will discourage people from involving in crypto space.