Cryptocurrency Legality in India: What You Can and Can't Do in 2025

When it comes to cryptocurrency legality in India, the legal status of digital assets in India is neither a full ban nor a free-for-all—it’s a tightly controlled gray zone. Also known as crypto regulation in India, it’s shaped by the Reserve Bank of India’s caution, tax enforcement, and a growing user base that refuses to disappear. You can buy, sell, and hold Bitcoin, Ethereum, and thousands of other coins. But you can’t use them as payment at your local store. You can’t open a crypto bank account. And you can’t ignore the taxman.

The RBI crypto rules, while not banning crypto outright, have made it harder for banks to serve crypto businesses since 2018. Also known as central bank stance on crypto, this pressure forced many exchanges to shut down or move offshore. But by 2020, the Supreme Court overturned the RBI’s banking ban, and suddenly, crypto trading exploded. Today, over 15 million Indians hold crypto—mostly through platforms like WazirX, CoinDCX, and ZebPay—all operating under strict KYC and AML rules. The government didn’t legalize crypto. It just stopped trying to stop it—and started taxing it instead.

Indian crypto tax, introduced in 2022, is one of the strictest in the world: a flat 30% tax on all profits, plus a 1% TDS on every trade. Also known as crypto income tax India, it treats crypto like gambling winnings—not investment income. That means no deductions for losses, no offsetting against other income, and no exemption for long-term holding. The government isn’t trying to kill crypto. It’s trying to capture every rupee of profit. This tax policy has pushed many traders to use offshore exchanges or peer-to-peer platforms like LocalBitcoins and Paxful. But even then, the Income Tax Department tracks crypto wallets through blockchain analysis and bank transaction patterns.

So what’s allowed? Buying, holding, and selling crypto. What’s not allowed? Using it to pay for goods or services, setting up a crypto payment gateway, or operating an unlicensed exchange. The government is pushing for a central bank digital currency (CBDC)—the e-Rupee—but that’s not crypto. It’s state-controlled digital money with no decentralization, no anonymity, and no price volatility.

And while China cracked down hard, India took a different path: regulate, tax, and monitor. The result? A thriving underground market with billions in monthly volume, a growing number of crypto entrepreneurs, and millions of retail investors who treat crypto like a side hustle—not a gamble. The rules are unclear, the taxes are heavy, and the penalties for evasion are real. But crypto isn’t going away. It’s just learning to play by India’s rules.

Below, you’ll find real reviews, deep dives, and blunt warnings from traders who’ve been there. From zero-fee exchanges that vanish overnight to stablecoins that keep working when banks don’t—this collection cuts through the noise. No theory. No hype. Just what’s actually happening on the ground in India’s crypto scene.