India’s assault on cryptocurrency tax evasion found $97 million in unpaid GST from key exchanges such as Binance and WazirX. The Ministry of Finance led the probe, which found widespread noncompliance among 17 cryptocurrency firms, indicating the government’s intention to impose harsher restrictions in the sector.
So far, WazirX, CoinDCX, and CoinSwitch Kuber have paid $14 million in penalties, interest, and settlements. WazirX alone was responsible for $4.8 million in delinquent taxes and paid an extra 20% penalty, bringing the total payment to $5.8 million.
Binance, the world’s largest cryptocurrency exchange, has yet to pay a staggering $85 million tax bill. Unlike other companies that rapidly settled their debts, Binance’s issue remained unresolved, calling attention to its compliance policies in India.
This tax crackdown is part of India’s larger push to control the fast-growing cryptocurrency business. In recent years, the government has implemented a 30% flat tax on cryptocurrency earnings and a 1% tax deducted at source (TDS) on all transactions. Despite the government’s intention to enhance transparency, the unduly stringent procedures have created barriers for both investors and exchanges.
Gains in digital assets cannot offset losses, and beneficiaries must pay taxes on cryptocurrency gifts, further complicating matters. This lack of transparency, especially for non-exchange wallets, has exacerbated compliance efforts.
As the crackdown deepens, the message becomes clear: India’s government is serious about pursuing tax compliance in the cryptocurrency sector. For exchanges like Binance, timely payment may be critical to preserving credibility and confidence in one of the world’s fastest-growing digital markets.
