According to The Economic Times, the Central Board of Direct Taxes (CBDT) has ordered a coordinated probe into over 400 high-value accounts tied to the exchange’s trading platform.
Each regional tax office has been directed to submit its findings by October 17, marking the start of a nationwide, data-driven operation aimed at identifying unreported crypto income and cross-border tax violations.
Why the Stakes Are Rising
India’s crypto traders already face one of the world’s heaviest tax regimes, with a 1% tax deducted at source (TDS) on every trade and a 30% capital gains tax, a figure that can exceed 42% after surcharges. Officials suspect that many Binance users have been circumventing these rules through peer-to-peer (P2P) transactions, where funds are exchanged directly between domestic bank accounts or digital wallets, sometimes even using Google Pay or cash to avoid traceability.
From Ban to Cooperation
The investigation follows Binance’s return to the Indian market less than a year ago, after being banned in late 2023 for alleged noncompliance with the Prevention of Money Laundering Act (PMLA). The exchange has since pledged to work with regulators, but the new probe suggests India’s financial watchdogs are far from easing up.
Analysts say the operation could shape the next phase of India’s crypto taxation policy, testing whether stricter enforcement will bring more transparency, or drive traders further underground.