Cryptocurrency Laws in India: What You Need to Know Before Investing

When you buy cryptocurrency, a digital asset that operates independently of banks and uses blockchain technology to record transactions. Also known as digital currency, it lets you send value across borders without intermediaries. You’re not just buying coins—you’re stepping into a legal gray zone shaped by taxes, banking rules, and government warnings. India doesn’t ban crypto, but it doesn’t recognize it as legal tender either. That means you can trade, hold, and use it, but the government treats it like property, not money.

That’s where crypto taxation, the set of rules that determine how gains from buying, selling, or trading digital assets are taxed under Indian income law. comes in. If you made a profit from Bitcoin or Ethereum in the last year, you owe 30% tax on it—no deductions, no losses offset. And if you paid fees to trade it, you can’t write those off. On top of that, there’s a 1% TDS on every crypto transaction over ₹50,000 (or ₹10,000 in a single day). This isn’t a suggestion—it’s enforced by banks and exchanges. If you don’t report it, you risk penalties or audits.

India crypto regulations, the evolving legal framework set by the Reserve Bank of India and Finance Ministry that governs how digital assets can be bought, sold, and used within the country. are still being shaped. The government has floated ideas for a central bank digital currency (CBDC), but no clear licensing system exists for crypto exchanges. That’s why some platforms shut down or moved overseas. Others stay open, but they’re required to collect KYC details and report large transactions. You need to know who you’re dealing with—unregulated platforms can disappear overnight, and you’ll have no legal recourse.

Then there’s blockchain legal status, the recognition of the underlying technology that powers cryptocurrencies, separate from the coins themselves.. While crypto itself sits in legal limbo, blockchain tech is actively encouraged. The government has funded pilot projects for supply chain tracking, land records, and voting systems using blockchain. That means the tech is safe, even if the coins aren’t fully protected. If you’re using crypto for remittances, DeFi, or NFTs, you’re operating without consumer protection. There’s no FDIC-style insurance. No chargebacks. No refund policies. You own the keys, you own the risk.

People ask: Is crypto legal in India? Yes. Is it safe? Only if you know the rules. You can’t ignore taxes. You can’t trust every app. You can’t assume the law won’t change again next year. The posts below give you real, local examples—how traders in Mumbai file returns, what happens when a wallet gets hacked in Bangalore, how a small business in Jaipur accepts crypto without breaking rules. No theory. No hype. Just what’s working, what’s risky, and what you need to do before you send your first rupee into a crypto wallet.