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Indian tax officials have initiated an inquiry into more than 400 affluent traders utilizing Binance, suspecting extensive crypto tax evasion, as reported by The Economic Times.
Key Takeaways:
- India’s tax authority is examining over 400 Binance traders for purportedly evading the nation’s high crypto taxes.
- The investigation centers on activities from 2022 to 2025 and includes an examination of peer-to-peer transactions.
- Binance, which was previously banned and later reinstated after paying a penalty, is now facing increased regulatory scrutiny.
The investigation, led by the Central Board of Direct Taxes (CBDT), focuses on activities between 2022-23 and 2024-25 and has directed regional offices to report findings by October 17.
India’s Crypto Tax Burden Reaches 42.7% for Top Earners, Probe Targets Evasion
The traders under investigation are accused of evading India’s high crypto taxes, which consist of a 1% withholding tax on each transaction and a 30% tax on profits.
When combined with additional surcharges and a 4% cess, the effective tax rate can escalate to 42.7% for top earners.
The government has upheld its stringent approach towards digital assets, with Union Minister Piyush Goyal recently reiterating India’s dedication to advancing its central bank digital currency (CBDC) while continuing to impose heavy taxes on private cryptocurrencies.
Binance was prohibited from operating in India in late 2023, alongside eight other offshore exchanges, after the Financial Intelligence Unit (FIU) accused them of breaching the Prevention of Money Laundering Act.
The company subsequently paid a $2.25 million fine and re-entered the Indian market in August 2024 after registering as a “reporting entity,” a step that reportedly allowed authorities to access data for the ongoing tax investigation.
BREAKING:
Indian Tax Dept targets 400+ wealthy individuals for hiding crypto profits on offshore Binance wallets.
– CBDT orders probe reports by Oct 17
– Traders failed to disclose digital assets held abroad
– Binance’s FIU registration helped authorities trace hidden… pic.twitter.com/COWs4uApOv— Crypto India (@CryptooIndia) October 12, 2025
Indian Tax Dept targets 400+ wealthy individuals for hiding crypto profits on offshore Binance wallets.
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Investigators are also examining peer-to-peer (P2P) transactions conducted via Binance that were settled using local bank accounts, Google Pay, or cash, according to the report.
While cash settlements have since been halted, authorities suspect these methods may have been utilized to obscure taxable income.
The investigation contributes to the mounting regulatory challenges confronting Binance, which is also managing repercussions from token depegs and system failures in other markets.
The exchange recently committed to compensating affected traders, as the wider crypto industry continues to face unprecedented liquidations and heightened government oversight globally.
14 Sentenced to Life in India for Kidnapping Crypto Investor
In August, an Indian anti-corruption court sentenced 14 individuals, including 11 current and former police officers and ex-legislator Nalin Kotadiya, to life imprisonment for the 2018 kidnapping and extortion of businessman Shailesh Bhatt regarding his cryptocurrency assets.
The group was found guilty of kidnapping, conspiracy, and corruption-related offenses by a special court in Ahmedabad.
The incident dates back to February 2018, when Bhatt was abducted at gunpoint by individuals impersonating CBI officers and taken to a farmhouse near Gandhinagar.
He was coerced into transferring 34 Bitcoin valued at approximately $150,000 at that time. The kidnappers also demanded an additional 176 BTC and ₹32 crore ($3.6 million), although the second ransom attempt failed when the courier became suspicious.
In the same month, India’s Enforcement Directorate (ED) conducted raids at 11 locations across various cities, including Delhi, in connection with a global crypto fraud scheme. This crackdown followed FIRs filed by the CBI and Delhi Police.
According to officials, the accused posed as law enforcement or tech support agents to extort funds from both Indian and foreign nationals.
The post India Probes 400 Binance Traders for Alleged Crypto Tax Evasion: Report appeared first on Cryptonews.
