There's no outright ban on holding or trading cryptocurrency in India, but it also isn't recognised as legal tender — you can't use it to pay for goods, settle debts, or as official currency. The regulatory picture is still evolving: RBI's public position has reportedly hardened toward favoring tighter restrictions, while a multi-regulator framework (SEBI for exchanges and security-like tokens, RBI for cross-border flows, Finance Ministry on tax policy) is under discussion for clearer oversight.
| Rule | Detail |
|---|---|
| Tax on gains | Flat 30% + 4% cess on profits (classified as "Virtual Digital Assets") |
| Loss offset | Not allowed — crypto losses cannot be set off against other income or gains |
| TDS | 1% on transactions above Rs 10,000/year (Rs 50,000 for certain specified persons) |
| Late/incorrect filing | Daily penalty of Rs 200 for entities that fail to file transaction statements accurately (from 1 April 2026) |
This tax treatment is deliberately strict compared to stocks or mutual funds — there's no indexation benefit and no expense deduction beyond acquisition cost. Every transaction, even small ones, should be tracked for filing.
Clear video lessons on how crypto actually works, the risks, and how to stay safe — financial education, not investment advice.
Start free lesson →Yes, buying/selling/holding is legal — but it's not legal tender, and regulation is still evolving.
Flat 30% + 4% cess on profits, no loss offset, plus 1% TDS on transactions above Rs 10,000/year.
Check for FIU-IND registration as a VDA Service Provider, and treat guaranteed-return promises as a red flag.
This is general financial education, not investment or tax advice. Legal status, tax rates and TDS thresholds summarized from public reporting on India's 2026-27 crypto tax framework and FIU-IND registration data, current as of August 2026. Tax rules can change — confirm current rates with a qualified CA before filing.