Tax authorities in India are said to be investigating over 400 high-net-worth individuals that are using crypto exchange Binance. These accounts are being suspected of attempting to bypass India’s high taxes on crypto transactions, a report from The Economic Times has claimed.
The traders could potentially be evading taxes on crypto trades thought to be carried out between the financial year 2022-2023 and 2024-2025. India’s Central Board of Direct Taxes has reportedly asked departments in various cities to inform authorities by October 17, 2025 regarding this matter.
As reported, cryptocurrency transactions in India are subjected to a 1% withholding on each completed transfer (which is to be applied against the overall bill), along with a 30% tax on any capital gains, as well as an additional 4% cess. Taken collectively, this may increase the effective rate to over 40% for large-volume traders.
As covered, India’s Union Minister Piyush Goyal recently stated that the government now intends to focus more on issuing a central bank digital currency (CBDC). And to discourage the use of decentralized cryptocurrencies, heavy taxes are to be applied on such transactions.
Earlier, digital assets platform Binance had been blocked from doing business in India. Several other crypto exchanges were also told to suspend activities as the Financial Intelligence Unit (FIU) had alleged that the platforms had been offering services illegally. The exchanges were accused of doing business without adhering to the guidelines of the nation’s Prevention of Money Laundering Act.
Binance then proceeded to re-launch operations in India during the past year, after paying a relatively modest fine while also registering as a reporting entity with the FIU.
During the past 7-8 years, especially after the crypto bull market of 2017 that saw Bitcoin surge from $1,000 in January 2017 to nearly $20,000 in December 2017, authorities in Asian countries like China and India have cracked down on the nascent sector. This is partly due to the rise of crypto scams as well as the threat that decentralized crypto-assets pose to centralized financial systems and the perception that they could challenge the power of nation-states due to their permissionless nature.
