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As of 2025, buying, selling, and holding cryptocurrency in India is legal. Digital assets like Bitcoin and Ethereum are officially recognized as “Virtual Digital Assets” (VDAs) under the Income Tax Act, but they aren’t considered legal tender—meaning you cannot use them for daily purchase of goods or services.
Key Regulatory Bodies
India has adopted a multi-agency regulatory model:
- Reserve Bank of India (RBI): Oversees financial stability and central bank digital currencies.
- Securities and Exchange Board of India (SEBI): Monitors crypto tokens that resemble securities, starting April 2025.
- Ministry of Finance: Implements tax policies on crypto gains.
- Financial Intelligence Unit India (FIU-IND): Ensures compliance with anti-money laundering (AML) standards.
Major Taxation Rules
Indian crypto investors face strict taxes:
- 30% tax on all gains from trading or selling cryptocurrencies.
- 1% TDS (Tax Deducted at Source) on transactions exceeding ₹50,000 per financial year.
- New GST guidelines: Some platforms now apply 18% GST on certain crypto transactions, expanding in July 2025.
RBI’s 2025 Crypto Framework & The Digital Rupee
The RBI’s new framework for 2025 launched clearer regulations for crypto-linked banking services. Banks can now provide limited services to compliant crypto exchanges and businesses, but cannot directly trade or invest in cryptocurrencies. The pilot of the Digital Rupee (e₹) has expanded, giving Indians an official digital currency for retail and wholesale transactions—further restricting the utility of private cryptocurrencies as payment.
Compliance and Reporting
All registered crypto service providers must submit compliance and transaction reports to regulators, following strict AML guidelines. International exchanges serving Indian users have begun aligning with local laws to stay operational.
What’s Next for Crypto in India?
India’s regulatory approach continues to evolve. The government is considering more nuanced rules to differentiate between different types of digital assets, such as utility tokens, security tokens, and standard cryptocurrencies. Discussions on further reforms, investor protection, and possible new exemptions are ongoing. The upcoming Budget 2025 and future bills will likely shape the next phase of India’s crypto regulations.
In summary: While cryptocurrencies aren’t banned in India, they’re strictly taxed, regulated by several government agencies, and not accepted as legal tender. The introduction of the Digital Rupee, evolving tax rules, and stronger compliance requirements reflect India’s cautious stance—balancing innovation with investor protection and financial stability.
About the Author
Beyond his commitment to technology journalism, Ankit is a joyful gymgoer who believes in maintaining a balanced lifestyle.
