We report evidence of paleo–cold seep associated activities, preserved in methane‐derived carbonates in association with chemosynthetic clams (Calyptogena sp.) from a sediment core in the Krishna‐Godavari basin, Bay of Bengal. Visual observations and calculations based on high‐resolution wet bulk density profile of a core collected on board R/V Marion Dufresne (May 2007) show zones of sharp increase in carbonate content (10–55 vol %) within 16–20 meters below seafloor (mbsf). The presence of Calyptogena clam shells, chimneys, shell breccias with high Mg calcite cement, and pyrite within this zone suggest seepage of methane and sulfide‐bearing fluid to the seafloor in the past. Highly depleted carbon isotopic values (δ13C ranges from −41 to −52‰ VPDB) from these carbonates indicate carbon derived via anaerobic oxidation of methane. Extrapolated mean calendar age (∼58.7 ka B.P.) of the clastic sediments at a depth of 16 mbsf is close to the upper limit of the U‐Th based depositional age (46.2 ± 3.7 and 53.0 ± 1.6 ka) of authigenic carbonates sampled from this level, thereby constraining the younger age limit of the carbonate deposition/methane expulsion events. The observed carbonate deposition might have resulted from the flow of methane‐enriched fluids through the fracture network formed because of shale diapirism.