India's tax authorities are investigating over 400 high-net-worth Binance users for allegedly evading a 1% withholding tax and a 30% capital gains tax, resulting in an effective tax rate of 42.7%. Binance, after paying fines and registering with financial intelligence agencies in 2024, has re-entered the Indian market to assist in tracking transactions. Since 2022, India has intensified its tax reporting and enforcement mechanisms for cryptocurrencies, classified as virtual digital assets (VDAs). The high tax burden has led to capital outflows, but increased compliance measures are narrowing opportunities for offshore tax evasion.