India Targets Crypto Tax Evasion: Binance Users Under Scrutiny
Indian tax authorities are cracking down on wealthy individuals accused of hiding cryptocurrency trades. The Central Board of Direct Taxes (CBDT) is leading the charge.
Over 400 high-net-worth individuals are in the crosshairs for concealing crypto trades on binance between 2022 and 2025. These traders allegedly evaded taxes on their crypto profits. The CBDT has ordered investigation teams in major cities to submit progress reports by October 17. Many used offshore platforms, thinking they could dodge India’s strict crypto taxes.
The Central Board of Direct Taxes (CBDT) has instructed investigation teams in major cities to report their findings by october 17. The focus is on traders who used offshore platforms like Binance and peer-to-peer transfers to evade taxes. These traders failed to disclose their digital assets, hoping to avoid India’s heavy crypto taxation, which includes a 1% tax on sales and profit taxes ranging from 33% to 42%.
Investigators are closely examining peer-to-peer trades on Binance, where buyers and sellers in India matched and settled transactions through domestic bank accounts, Google Pay, or cash. Mumbai-based chartered accountant Siddharth banwat notes that the tax department can issue summons for proper reporting during income tax return filing.
Severe penalties await non-compliant traders. Ashish Karundia, founder of Ashish Karundia & Co., warns that the era of crypto anonymity is ending. Failure to report virtual digital assets can lead to reassessment, scrutiny, and potential penalties under Section 270A. Omission from Schedule FA could trigger the Black Money Act, resulting in hefty fines and possible prosecution.
Karundia advises taxpayers to reconcile their VDA activity and file updated returns before enforcement intensifies. Once authorities escalate actions, compliance options may be limited.
