Answer

1. F

   Facts

   Trading on Binance, Coinbase, Kraken, or any foreign exchange creates several compliance obligations beyond just income tax:

2. P

   Provisions and law

   • IT Act, Sec 194 (old 115BBH) | FEMA 1999 | Schedule FA | Black Money Act 2015
3. A

   Analysis

   Schedule FA disclosure: If you hold crypto on a foreign exchange, it may constitute a "foreign asset", particularly if the exchange is foreign and holds the asset in custody. Non-disclosure = ₹10L penalty under Black Money Act. FEMA: Sending INR to a foreign exchange to buy crypto constitutes an outward remittance, must be within LRS limit (₹7Cr per year for current limit). Moving crypto gains back to India requires proper documentation of source. Sec 102, Income-tax Act 2025 (old Sec 68) risk: Crypto profits from foreign exchange credited to your Indian bank account without clear source documentation = unexplained cash credit = 78% effective tax.

4. C

   Conclusion

   1. 1Maintain full transaction history from all foreign exchanges, CSV exports, quarterly
   2. 2When repatriating to India: FIRC from bank showing foreign source of funds
   3. 3Declare in Schedule FA if you hold assets on foreign custodial exchange
   4. 4Check if foreign exchange reports to Indian authorities, some do under bilateral agreements

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.