Indian tax authorities are now investigating over 400 Binance traders who supposedly didn’t report their cryptocurrency gains. The investigation is using trading data that Binance had to hand over to India’s Financial Intelligence Unit after registering as a reporting entity back in 2024.
The authorities are digging through trades from 2022 to 2025, looking for discrepancies between what people reported and what they actually made. They’re cross-referencing wallet movements, peer-to-peer trades, and bank deposits to catch anyone who tried to hide profits.
India’s crypto tax system is brutal; there’s a 1% tax deducted at the source on every transaction plus a 30% tax on profits. When you add in surcharges and health taxes, the effective rate can hit around 42.7% for high earners. That’s serious money, which explains why some people tried to hide their gains.
The whole thing started when Binance registered with the Financial Intelligence Unit after a regulatory settlement in 2024. Once the exchange handed over transaction logs, the tax guys had everything they needed to follow the money trail back to bank accounts and identify unreported income.
Tax offices across multiple Indian cities have been told to investigate traders with significant earnings. They’re particularly focused on people using peer-to-peer settlements and domestic payment apps like Google Pay to convert crypto to regular money.
If authorities expand this beyond Binance to other exchanges, the crypto community in India is going to face serious heat.
Conclusion
Indian tax authorities are probing 400+ Binance traders using FIU data from 2022-2025 to catch unreported crypto profits amid 42.7% effective tax rate enforcement.
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