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.
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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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.
