- India is investigating over 400 crypto traders for evading tax.
- Crypto traders in India often use offshore wallets to evade high taxes.
- India has one of the highest crypto tax regimes in the world.
According to reports, the Indian Income Tax Department has launched an investigation involving over 400 high-net-worth individuals over crypto tax evasion. Initial reports suggest that the suspects concealed profits made from cryptocurrency investments in offshore Binance wallets.
The investigation deadline is October 17
Following a request from the Indian Central Board of Direct Taxes (CBDT), investigators will scrutinize the suspects’ cryptocurrency trades and transactions made between the 2022-23 and 2024-25 fiscal years. This request from the CBDT includes a deadline of October 17, 2025, for the investigating team to submit a report for further action.
Related: Part of a $3.3 Billion Sweep, India’s Tax Man Finds $124 Million in Undeclared Crypto
Initial reports revealed that most of the 400 individuals under scrutiny failed to report digital assets they held abroad, hoping to evade heavy crypto taxes in India. However, Binance’s registration with India’s Financial Intelligence Unit (FIU) has become the undoing of the traders. It allows the Indian regulatory authority to investigate and trace previously hidden wallets.
India’s Crypto Tax rate is one of the highest worldwide
It is worth noting that India has a significantly high tax regime on cryptocurrencies, ranging between 33% and 38%. The current crypto tax rate in India is even lower than the rate from the past era, when crypto practitioners were liable to a tax rate as high as 42%. Additionally, the high tax rate in India includes an extra 1% Tax Deducted at Source (TDS), which the authorities charge on each crypto transaction.
Related: India Chases Crypto Tax Evaders With Over 44,000 Warning Notices
The cumulative sum of taxes reveals that India arguably has the highest tax responsibilities on cryptocurrency engagements worldwide. That has led many cryptocurrency traders and investors from the region to adopt offshore platforms in their efforts to avoid the heavy taxes.
According to reports, most Indian crypto investors seeking to avoid taxes purchase stablecoin like USDT tokens locally, transfer them to offshore wallets, and exchange them for other cryptocurrencies, such as Bitcoin and Ethereum.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
