Is Cryptocurrency Legal in India (2025 Update)?

✅ What is legal

• The Indian government does not ban cryptocurrencies. You can buy, sell and hold crypto assets in India.

• Cryptocurrencies are treated as “Virtual Digital Assets (VDAs)” under tax law (e.g., Income Tax Act, 1961) rather than as legal tender.

• Taxation rules are in place:

  • A flat 30% tax on gains from transfer of VDAs.

  • A 1% Tax-Deducted-at-Source (TDS) on certain crypto transactions.

• Compliance and anti-money-laundering (AML) rules apply to crypto exchanges and service-providers. For example, registration with Financial Intelligence Unit – India (FIU-IND), KYC requirements, transaction reporting.

🚫 What is not legal or not fully defined

• Cryptocurrencies are not legal tender in India. That means they are not recognized as official currency that must be accepted for debt/payment purposes.

• There is no comprehensive standalone law yet that fully regulates all aspects of cryptocurrencies (though several bills and frameworks are proposed).

• Because the regulatory framework is still evolving, many aspects (like classification of tokens, cross-border crypto, derivative trading, stable coins) remain ambiguous.

📌 Key points for Indian investors in 2025

• Make sure you use licensed/registered crypto exchanges that comply with KYC/AML and tax reporting.

• All profits from crypto transfers must be reported in your Income Tax Return. Losses from VDAs generally cannot be set off against other income or carried forward.

• Since crypto is not legal tender, using it directly for payment of goods/services carries risk and may fall into grey regulatory zones.

• Stay updated on regulatory changes: The government is reviewing its approach, and there are signals that further regulation (and possibly stricter enforcement) is on its way.

🔍 Summary

In plain terms:

Yes, you can legally trade and hold crypto in India as of 2025 — but no, it is not fully “legalised” or treated like fiat currency, and significant regulatory/tax obligations apply.