India has initiated a high profit investigation on Binance.

Indian tax authorities have begun investigating a significant number of investors trading on Binance due to recent high profits. In this context, the transactions of more than 400 wealthy individuals between 2022-2023 and 2024-2025 are under scrutiny.

The Indian Income Tax Department (CBDT) has requested detailed reports on investors' transactions due to suspicions that cryptocurrency gains have not been declared. The high tax rates imposed on crypto income in the country are noteworthy. Investors face a 1% deduction for every crypto transfer and are required to pay a 30% tax on their profits. Additionally, with extra deductions and a 4% "cess" applied to these taxes, the total tax rate for high-income individuals can rise up to 42.7%.

Indian Minister of Industry Piyush Goyal announced that the government would continue its high taxation on cryptocurrencies while focusing on central bank digital currency (CBDC) efforts. Binance was banned by the Indian Financial Intelligence Unit (FIU) for unauthorized activities at the end of 2023. However, in August 2024, it regained the right to operate by paying a fine of $2.25 million and registering as a "reporting entity." This registration allowed Binance to share information related to the suspicion of tax evasion.

In the ongoing investigation, Binance’s local bank accounts, Google Pay, and cash payments made in P2P transactions are also being examined. However, it has been noted that the cash payment option in these transactions was completely removed later. This situation may further complicate investors' transactions on Binance.

Recently, Binance has pledged to compensate its users due to price discrepancies in different markets. This announcement is considered an important step to maintain trust in the market following record levels of liquidations. Investors should closely monitor the effects of the high tax rates and investigations arising during this process.