- Indian tax probe targets 400 Binance traders for crypto tax evasion.
- Binance’s India comeback triggers renewed scrutiny from financial regulators.
- Government reinforces strict crypto taxes while advancing digital currency plans.
India’s tax authorities have intensified their crackdown on cryptocurrency tax evasion, targeting more than 400 high-net-worth individuals trading on Binance. According to The Economic Times, these traders are suspected of avoiding taxes on crypto transactions between 2022-23 and 2024-25. The Central Board of Direct Taxes has directed regional departments to submit detailed reports by October 17 on the actions taken so far.
India’s crypto taxation framework imposes a 30% tax on profits and a 1% withholding tax on each transaction. With additional surcharges and a 4% cess, top-bracket taxpayers can face effective rates approaching 42.7%. Authorities believe several Binance traders failed to disclose gains from their crypto activities, especially through peer-to-peer transactions involving local bank accounts and digital payment platforms such as Google Pay.
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Binance’s Return to India Sparks Renewed Scrutiny
Binance had been blocked from operating in India since late 2023 after being accused of violating anti-money laundering regulations. The exchange re-entered the Indian market in August 2024 after paying a $2.25 million penalty and registering as a reporting entity under the Financial Intelligence Unit. That registration, according to the report, enabled Binance to share data with regulators and facilitated the current probe into potential tax violations.
Investigators are now focusing on whether some users conducted domestic settlements using fiat payments outside regulated exchange channels. Authorities suspect that this approach was used to bypass India’s strict crypto reporting and taxation rules. Notably, Binance discontinued its cash settlement option following early regulatory pressure.
Government Maintains Tough Stance on Crypto While Advancing CBDC
India’s government continues to adopt a stringent approach toward private cryptocurrencies. Union Minister Piyush Goyal recently reaffirmed plans to expand work on the central bank digital currency while sustaining high taxation on non-government-backed digital assets. This reflects the administration’s strategy to encourage compliance while maintaining control over the country’s digital financial ecosystem.
Meanwhile, Binance faces additional challenges globally as it deals with trader losses from depegging incidents in multiple markets. The exchange has pledged to compensate affected users as part of its broader effort to restore confidence amid increased scrutiny from regulators worldwide.
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