Indian Tax Authority Investigates 400 High-Net-Worth Binance Traders

[Ben Graham]

India’s Income Tax department has launched an investigation into more than 400 high-net-worth Binance traders. The Indian tax authorities, headed by the Central Board of Direct Taxes (CBDT), suspect tax evasion despite the country’s stringent crypto tax rules. 

The investigation appears to be targeting offshore trading activities. According a 11 October 2025 Economic Times report, “the persons identified had evaded tax on their crypto profits, with many not disclosing the digital coins parked in wallets with the overseas exchange.”

Interestingly, the investigation focuses on crypto transactions conducted between the financial years 2022-2023 and 2024-2025. Both direct trades and peep-to-peer (P2P) transactions are being examined. According to the department, the transactions may have been used to circumvent tax obligations.

An updated report on this investigation is expected by 17 October 2025.

That tends to happen when you extort your citizens with 30% capital gains tax with no loss adjustment which basically means 40-50% tax.

— Chetan Kaul (@chetan_kaul) October 12, 2025

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Indian Union Minister Says “We Are Taxing Crypto Very Heavily”

Indian Union Minister Piyush Goyal recently said that the country will not be encouraging cryptocurrency, “which does not have sovereign backing or which is not backed by assets, say it on the federal bank or local currency.”

Goyal also threw light on the country’s stance on cryptocurrency.  He said, “As far as cryptocurrency, which is not backed by the Central Government, while there is no ban as such, we are taxing it very heavily. We don’t encourage it because we don’t want anybody to be stuck at some point with a cryptocurrency that has no backing and nobody at the backend.”

Currently, India’s stance is that it neither encourages nor outright bans crypto. But it imposes heavy taxes on digital assets. The tax includes 30% capital gains tax and 1% Tax Deducted at source (TDS). These heavy taxes have been in place since July 2022.

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Binance’s Turbulent Record In India 

The world’s largest exchange was banned from India in 2023. At the time, it was found that Binance had failed to comply with India’s Money Laundering Act. After meeting the country’s legal requirements and paying hefty fine of $2.25 million, the exchange re-entered the Indian market in 2024.

Vishal Sacheendran, Head of Regional Markets at Binance, revealed that the company was not allowed to add more users in India after the ban that lasted till August 2024. Once the company tweaked their KYC structure in accordance with India’s Financial Intelligence Unit (FIU), operations became smoother.

In an interview with a local media outlet on 10 February 2025, Sacheendran said that India is a key market in Binance’s gameplan. The company said that it has no intention of leaving the country.

In December 2023, authorities in India found the company to be unregistered with the FIU. This eventually led to the blocking of Binance URL and apps on Android and Apple store.

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Key Takeaways

Indian

Tax officials have identified numerous wealthy traders who failed to disclose their cryptocurrency holdings stored in Binance wallets or report profits generated from trading activities on the offshore platform.

Binance’s operating status in India has experienced significant turbulence over the past two years.

 

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