In order to avoid this fees, I was initially considering purchasing bitcoins locally from localbitCoins.com. But I want to save tax if I purchase bitcoins locally. I am ready to pay tax on bitcoin profit If I use international exchange because I can't hide a bank transaction but I don't want to pay tax if I buy it locally.

I can purchase Bitcoin using "Cash deposit" payment option on localbitcoins.com. I don't want to go with "cash-in-person" option because it is kinda risky.

In India, I can deposit cash in anyone's account without giving my bank A/c no. and name. But the localbitcoin's users who are accepting cash deposit as a payment option are asking for my govt. ID with photo. If he reports to IRS that he received money from me for selling Bitcoins, I won't be able to save tax. That's why I was considering international exchange but it will include too much fees as well as tax on bitcoin profit.

What route should I select for bitcoin purchase?  Local or international exchange?