India Intensifies Crypto Crackdown: Binance Faces Expanded Tax Evasion Probe

India's tax authorities are turning up the heat on cryptocurrency traders—and Binance is squarely in their crosshairs.

The Investigation Widens

What started as routine tax monitoring has exploded into a full-scale investigation targeting unreported crypto income flowing through the world's largest exchange. Indian authorities are now chasing millions in undeclared transactions—because apparently, thinking your crypto profits are invisible to tax collectors is the new national pastime.

Regulatory Reckoning

The expanded probe signals India's determination to bring crypto into the taxable mainstream. With billions in potential revenue at stake, authorities are leaving no digital stone unturned. Binance users who thought they'd found a clever way to bypass traditional financial oversight are discovering that tax agencies have longer memories than crypto bull markets.

Just another reminder that in the world of digital assets, the only thing more certain than volatility is the taxman's persistence.

P2P transactions face increased scrutiny

Tax office investigators are examining peer-to-peer trades on Binance that involved matching buyers and sellers in India, with settlements processed through domestic bank accounts, Google Pay, or in cash.

Mumbai-based chartered accountant Siddharth Banwat noted that the tax department has the authority to issue a summons confirming proper reporting during income tax return filing.

Taxpayers who took aggressive positions by not reporting income can rectify this through filing updated returns at an extra tax cost.

The enforcement action shows India’s strengthened compliance framework for VIRTUAL digital assets.

Tax authorities now have access to transactional data from cryptocurrency exchanges, enabling the identification of mismatches and unreported income that previously went undetected.

Severe penalties await non-compliant traders

Ashish Karundia, founder of the CA firm Ashish Karundia & Co., warned that the veil of anonymity protecting crypto traders is being lifted.

Failure to accurately report virtual digital assets may trigger reassessment or scrutiny, with potential penalties under Section 270A.

More seriously, omission from Schedule FA could attract the Black Money Act, bringing hefty fines and possible prosecution.

Karundia advised taxpayers to undertake a comprehensive reconciliation of VDA activity and explore corrective mechanisms like updated returns before enforcement intensifies.

Once authorities escalate enforcement actions, taxpayers may find themselves with limited options for compliance.