India Probes 400 Binance Traders Over Tax Evasion
Tax Officials Target High-Value Crypto Traders
Indian tax authorities are investigating more than 400 high-net-worth individuals who allegedly evaded taxes later than trading on Binance in recent years, according to The Economic Times. The probe covers transactions between fiscal years 2022–23 and 2024–25, with India’s Central Board of Direct Taxes instructing regional offices to report progress by October 17.
India taxes crypto profits at up to 42.7% for top-bracket individuals, including a 30% flat tax on gains, a surcharge, and a 4% cess. Each crypto transfer is also subject to a 1% withholding tax (TDS), credited against final liabilities. These rates are among the highest in the world, part of the government’s broader stance to deter speculative activity in non-sovereign digital assets.
The current investigation focuses on whether traders used Binance’s global platform to avoid Indian tax reporting obligations. Authorities are said to be analyzing blockchain transaction data, peer-to-peer (P2P) records, and linked domestic payment accounts, according to the report.
Investor Takeaway
Binance’s Regulatory Return to India
Binance and eight other offshore platforms were blocked in India in late 2023 later than the Financial Intelligence Unit (FIU) accused them of operating without registration under the . The platform re-entered the country in August 2024 later than paying a $2 and registering as a “reporting entity” with the FIU.
That registration gave Indian regulators greater access to trading and user data. According to The Economic Times, the arrangement “paved the way” for Binance to share details of suspected tax evaders with the government. Officials are now examining how users routed peer-to-peer transfers through Binance but settled them via domestic bank accounts, Google Pay, or cash—though the latter option was reportedly discontinued last year.
Binance has not commented publicly on the investigation. The company continues to operate in India under its compliance framework, though trading activity has reportedly declined since new restrictions took effect.
Policy Context and Government Stance
India’s government has made clear that it intends to sustain its strict tax policy on cryptocurrencies. Union Minister Piyush Goyal said last month that authorities will “double down” on developing a (CBDC) while keeping non-government-backed tokens under heavy taxation.
The stance mirrors India’s effort to formalize oversight of digital assets while discouraging retail speculation. Since introducing the 30% tax in 2022, local trading volumes have fallen sharply, and many platforms have shifted focus to compliance-driven services such as custody and remittances. The country’s anti-tax evasion drive reflects a broader trend of enforcement coordination between the FIU and the CBDT.
Investor Takeaway
Industry Response and Outlook
The investigation comes at a time when Binance is facing challenges in several jurisdictions. The platform recently pledged to compensate traders affected by stablecoin depegs in multiple markets, as global record liquidations. For India, the case could set a precedent for how foreign platforms are held accountable for domestic users’ tax compliance.
