This jurisdiction has evolving or restrictive regulations that require careful compliance. Additional licensing, reporting, or operational constraints may apply.
India Cryptocurrency Regulatory Overview
India's cryptocurrency regulatory stance remains uncertain and evolving. As of 2025, crypto is legal but faces significant regulatory challenges. The government implemented a 30% flat tax on crypto gains plus 4% cess, and 1% TDS on transactions exceeding ₹10,000 annually. In September 2025, India indicated it would resist creating comprehensive crypto legislation, preferring partial oversight to avoid systemic risks. However, conflicting reports in December 2025 suggested potential moves toward full legalization. The Reserve Bank of India has historically been skeptical of cryptocurrencies. The regulatory environment is characterized by high taxation, uncertain legal status, and potential future restrictions. Businesses and users face compliance complexity and regulatory risk.
India Blockchain Compliance Requirements
Legal Status: Legal but heavily taxed; comprehensive framework uncertain. Taxation: 30% flat tax on gains + 4% cess; 1% TDS on transactions >₹10,000. RBI Stance: Historically skeptical; no official ban but cautious approach. Banking: Banks permitted to service crypto businesses (2020 Supreme Court ruling). Regulation: Partial oversight; resistance to comprehensive framework (Sept 2025). Future Uncertainty: Conflicting signals on potential full legalization. AML/CFT: Basic requirements; evolving framework. Consumer Protection: Limited regulatory safeguards. Enforcement: Periodic scrutiny of exchanges and users. Risk Level: High regulatory uncertainty; potential for sudden policy changes.
Crypto Licensing Requirements in India
Crypto businesses, classified as Virtual Digital Asset Service Providers (VASPs), must register with the Financial Intelligence Unit - India (FIU-IND) as a Reporting Entity. This registration is mandatory for all entities, both domestic and offshore, that offer VDA-related services to Indian users, and it is a prerequisite for compliance with AML/KYC obligations.
Cryptocurrency Tax Treatment in India
Income from the transfer of Virtual Digital Assets (VDAs) is subject to a flat 30% tax rate, plus applicable surcharge and cess. Additionally, a 1% Tax Deducted at Source (TDS) is levied on the consideration paid for the transfer of VDAs under Section 194S of the Income Tax Act. No deduction is allowed for any expenditure or allowance, and losses cannot be set off against any other income.
Official Sources & Regulatory References
AML/CFT requirements may be stringent or evolving. Enhanced due diligence may be required.
Enforcement actions may be unpredictable or strict. Monitor regulatory developments closely.
Disclaimer: This information is provided for general guidance only and should not be considered legal advice. Regulations change frequently. Always consult with qualified legal professionals in the relevant jurisdiction before making business decisions.