Can Businesses in India Accept Crypto Legally in 2026?

Can a business in India legally accept Bitcoin or Ethereum as payment for goods or services? The short answer is no-not as a payment method. But here’s what most people miss: businesses in India can legally trade, hold, and service cryptocurrency. The rules aren’t about banning crypto-they’re about controlling how it moves through the economy.

Let’s cut through the noise. In 2026, if you run a store in Bangalore or a SaaS company in Hyderabad, you can’t slap a QR code on your counter and say, "Pay in Dogecoin." That’s not allowed. But you can run a crypto exchange, offer investment advice, build blockchain tools, or even mine Bitcoin-all legally, as long as you follow the rules. The Indian government didn’t outlaw crypto. It just made it expensive and complicated to use.

What the Law Actually Says

There’s no law that says "You can’t accept crypto." But there’s also no law that says "Crypto is legal tender." That’s the grey zone. The Supreme Court lifted the RBI’s 2018 banking ban on crypto in 2020, which meant banks could no longer block crypto transactions. But the court also made it clear: the government can still pass a law to ban it anytime. That’s still true today.

Instead of banning, the government chose to regulate through taxation. Since 2022, all cryptocurrency transactions have been classified as Virtual Digital Assets (VDAs) under the Income Tax Act. This means every time someone buys, sells, or trades crypto, the government takes a cut. For businesses, that means:

  • 30% flat tax on all crypto gains-with no deductions for losses.
  • 1% Tax Deducted at Source (TDS) on every crypto transfer, even if you’re just moving coins between wallets.
  • No expense deductions. If you spend $5,000 on mining equipment, you can’t write it off. Only the original purchase price of the crypto counts.

This isn’t a tax on crypto. It’s a tax on movement. The government wants to track every single transaction.

Compliance Isn’t Optional-It’s Mandatory

If your business touches crypto in any way-whether you’re an exchange, a wallet provider, or even a crypto-focused marketing agency-you must register with the Financial Intelligence Unit of India (FIU-IND). This isn’t a suggestion. It’s a legal requirement under the Prevention of Money Laundering Act (PMLA).

Since March 2023, every crypto service provider operating in India, even foreign ones serving Indian customers, must complete full KYC and AML checks. That means collecting government-issued IDs, verifying addresses, and logging every transaction. Binance got fined over ₹18 crore in 2024 for not doing this. Bybit paid ₹9 crore. Both now comply. If you’re not registered, you’re breaking the law.

And it gets stricter. India enforces the FATF Travel Rule with zero tolerance. That means every crypto transfer-no matter how small-must include full sender and receiver details. If you’re a merchant accepting crypto, you need to record not just the amount, but the wallet address of the buyer, their ID, and their location. Most small businesses can’t handle that level of tracking.

Why You Can’t Accept Crypto as Payment

Here’s the key point: the government allows you to own crypto. It allows you to trade it. It even taxes it heavily. But it refuses to let you use it as money.

Why? Because accepting crypto as payment for goods or services creates a loop the government can’t control. If a restaurant takes Bitcoin for pizza, and the customer later sells that Bitcoin for rupees, the government loses visibility into that conversion. It can’t track the capital gain. It can’t collect the 30% tax. It can’t apply the 1% TDS. So to keep control, they blocked it.

Compare this to the U.S. or EU, where businesses can legally accept crypto as payment. In India, the government doesn’t want to be a bystander. It wants to be the gatekeeper. Every time crypto changes hands, it wants to take a piece.

Crypto exchange employees complying with tax and KYC rules in a vibrant, swirling 1960s-inspired office.

What Businesses Can Legally Do

Just because you can’t accept crypto as payment doesn’t mean you can’t build a business around it. Here’s what’s allowed:

  • Operating a crypto exchange (with FIU-IND registration).
  • Providing crypto investment advice (as a registered advisor).
  • Developing blockchain software or smart contracts.
  • Running a crypto education platform or YouTube channel (with proper tax reporting).
  • Offering crypto mining services (with full KYC and tax compliance).

Many Indian startups are thriving in these spaces. CoinSwitch Kuber, ZebPay, and Bitbns all operate legally because they follow the rules. They don’t let users pay for services with crypto. They let users buy crypto with rupees-and they report every single transaction.

The Coming Change: COINS Act 2025

There’s a bill in the works called the Comprehensive Regulation of Cryptographic Assets (COINS) Act 2025. If passed, it could change everything. The proposed law would:

  • Formally recognize crypto as a legal asset class.
  • Create a licensing system for exchanges under RBI oversight.
  • Allow clearer tax deductions for trading fees and infrastructure costs.
  • Introduce consumer protections against scams and fraud.

It wouldn’t make crypto legal tender. But it might allow businesses to accept it as payment under strict conditions. Think of it like how credit cards were once seen as risky-until clear rules made them mainstream.

Right now, the bill is still under review. No timeline exists. But industry experts say it could pass in 2026 or 2027. If it does, businesses might finally get the green light to accept crypto as payment-provided they meet new compliance standards.

A door labeled COINS Act 2025 slightly open, with regulatory barriers blocking merchants in psychedelic art style.

Real-World Challenges

Even if you follow every rule, the real problem isn’t the law-it’s the banks. Many Indian banks still refuse to open accounts for crypto businesses. They’re afraid of being penalized. So even compliant businesses struggle to pay vendors, payroll, or rent in rupees because their bank won’t touch them.

Some startups solve this by using offshore banking or crypto-friendly fintechs. Others rely on cash payments or third-party payment processors. It’s messy. It’s inefficient. But it’s how businesses survive today.

And then there’s the cost. Setting up KYC systems, hiring compliance officers, building transaction monitoring tools, and filing monthly TDS reports adds up. For a small business, this might cost ₹5-10 lakhs per year. That’s not a tax. That’s a compliance tax.

Bottom Line

Can you accept crypto as payment in India? No. Not today. Not under current rules.

Can you build a profitable, legal business around crypto? Absolutely. But only if you treat compliance like a core part of your product-not an afterthought.

The government isn’t trying to kill crypto. It’s trying to control it. And if you’re going to play in this space, you need to play by their rules: register, report, pay, and document everything. The door isn’t closed. It’s just guarded.

Can I accept Bitcoin as payment for my online store in India?

No. Indian law does not recognize cryptocurrency as legal tender. Accepting Bitcoin or any other crypto as payment for goods or services is not permitted under current regulations. Doing so could trigger scrutiny from tax authorities and financial regulators, even if you report the transaction. You can, however, accept rupees and use a third-party service to convert the payment into crypto after the sale.

Is it legal to trade cryptocurrency in India as a business?

Yes. Trading cryptocurrency is legal if you’re registered with FIU-IND and comply with tax rules. You must report all gains under the 30% flat tax rate and pay 1% TDS on every transaction. Exchanges like CoinSwitch and ZebPay operate legally by following these rules. You cannot avoid registration-failure to register is a violation of the Prevention of Money Laundering Act.

What happens if I don’t register with FIU-IND?

If you operate a crypto service without FIU-IND registration, you’re violating the Prevention of Money Laundering Act (PMLA). Penalties include fines up to ₹1 crore, asset seizure, and potential criminal charges. Binance and Bybit were fined over ₹27 crore combined in 2024 for non-compliance. After paying the fines, they registered. Ignoring registration is not an option.

Do I need to pay tax if I hold crypto but don’t sell it?

No. You only pay tax when you sell, trade, or convert crypto into rupees or another asset. Holding crypto without selling doesn’t trigger a taxable event. But you must keep records of your purchase price and dates. If you later sell, the tax is 30% of the profit, with no deductions allowed-not even for fees or hardware costs.

Can I use crypto to pay my employees in India?

No. Paying employees in cryptocurrency is not permitted. Salaries must be paid in Indian rupees under the Payment of Wages Act. Even if an employee agrees to receive crypto, the law requires payment in legal tender. You can offer bonuses in crypto, but those would still be taxed as income at 30% and subject to TDS. Using crypto for payroll invites legal risk.

Will the COINS Act 2025 let me accept crypto as payment?

Possibly. The COINS Act 2025, if passed, could allow businesses to accept crypto as payment under a licensed framework. But it won’t make crypto legal tender. It would require businesses to use RBI-approved platforms, maintain full transaction records, and comply with strict KYC. Even if passed, implementation would take time. Don’t assume it’s coming soon-plan for the current rules.

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14 Comments

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    perry jody

    February 4, 2026 AT 23:55
    This is actually way more hopeful than I thought! 🤗 I was ready to write off India as crypto-dead, but the fact that you can build legit businesses around it? That’s the real story. The taxes are brutal, sure, but at least the door’s cracked open. Keep building, folks.
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    Paul Jardetzky

    February 6, 2026 AT 19:17
    The 1% TDS on wallet transfers is insane. Like, I send 0.01 BTC to my buddy for lunch? Government takes 1%? That’s not regulation, that’s extortion. No wonder people use P2P or cash. This isn’t controlling crypto-it’s punishing it.
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    Paul Gariepy

    February 8, 2026 AT 18:25
    Okay, so let me get this straight… you can mine, you can trade, you can build blockchain apps, but if you try to use crypto as money… you’re a criminal? That’s not logic, that’s bureaucratic insanity. They want to tax every single movement, but won’t let it move as currency? This isn’t regulation-it’s a tax trap with extra steps. And don’t even get me started on the bank account nightmare. I’ve seen startups shut down over this. It’s not the law-it’s the fear.
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    Jim Laurie

    February 10, 2026 AT 12:54
    The real villain here isn’t the government-it’s the banks. They’re so scared of getting slapped with a PMLA fine that they’ll ghost a perfectly legal crypto startup. It’s like the system is rigged to make compliance feel like a full-time job. And yet, somehow, people are still building. I mean… respect. You’re not just running a business-you’re running a guerrilla ops team with spreadsheets and KYC forms. The COINS Act might be the light at the end of the tunnel, but man, what a long tunnel.
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    Udit Pandey

    February 12, 2026 AT 06:25
    This article is dangerously misleading. India has always been a nation of discipline, order, and fiscal responsibility. Allowing crypto as payment would open the floodgates to money laundering, black market activity, and foreign exploitation. The government is not being harsh-it is being wise. Those who complain are the same people who want to bypass the system. We do not need Western-style chaos. We need structure. The 30% tax is fair. The TDS is necessary. Compliance is patriotism.
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    Sharon Lois

    February 13, 2026 AT 02:16
    So… they tax you 30% on gains, 1% on every transfer, no deductions, and then pretend they’re not banning it? Lol. This isn’t regulation-it’s a tax on hope. They’re not stopping crypto. They’re just making it so expensive to use that only the rich and the dumb survive. And the banks? They’re scared of their own shadows. Classic.
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    mahikshith reddy

    February 13, 2026 AT 09:20
    You think this is bad? Wait till the next generation wakes up. They’ll see this as the Dark Ages of finance. The government is clinging to rupees like a toddler to a blanket. Crypto is inevitable. The real question: will India lead… or become a footnote?
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    Brendan Conway

    February 15, 2026 AT 07:35
    I get why they’re scared. Crypto moves fast. But this feels like putting a speed limit on a highway that doesn’t exist. If people are gonna use it anyway, why not make it safe and clear? Just say ‘yes, but here’s how’ instead of ‘no, and here’s how much you’ll pay for trying.’
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    Katie Haywood

    February 15, 2026 AT 19:34
    The fact that Binance got fined ₹18 crore and then just… paid and registered? That’s not enforcement. That’s a fee schedule. The government’s not trying to stop crypto-it’s trying to monetize it. And honestly? I kinda respect that. It’s brutal capitalism with a tax form.
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    Matt Smith

    February 17, 2026 AT 16:28
    This is the most pathetic crypto policy I’ve ever seen. You can’t use it as money? But you can mine it? You can trade it? So what’s the point? It’s like letting someone own a Ferrari but only driving it in reverse. And now you’re taxing them for breathing near it? 🤡 I’m not even mad. I’m just impressed by how creatively they’ve invented a way to lose.
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    orville matibag

    February 19, 2026 AT 01:19
    I’ve seen this play out in other countries. First they ban, then they tax, then they regulate. India’s just in phase two. The COINS Act might be the bridge to phase three. But honestly? The real winners are the fintechs building compliance tools. They’re the ones making money off the chaos.
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    Josh Flohre

    February 19, 2026 AT 21:27
    This article is riddled with inaccuracies. The 30% tax applies to net gains, not gross. You can deduct the cost of acquisition. And TDS is only on the buyer’s side-seller doesn’t pay it. You’re misrepresenting the law to create fear. This is irresponsible journalism. Fix your facts before you mislead entrepreneurs.
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    Jesse Pasichnyk

    February 20, 2026 AT 12:19
    Look, I get it. Crypto’s wild. But India’s got 1.4 billion people. You don’t just let the wild west loose here. They’re being careful. That’s not evil-that’s responsibility. If you want to play in the sandbox, you follow the rules. Stop whining and build something that works within them.
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    Jordan Axtell

    February 21, 2026 AT 21:00
    I feel you. I’ve been there. Tried to open a crypto-related account. Bank called me three times asking if I was ‘involved with something illegal.’ I had to send them a 20-page compliance flowchart just to get a business account. They didn’t even read it. Just said ‘we’re not taking the risk.’ So now I use crypto to pay my freelance designer in Nepal. The system’s broken. But the people? They’re still finding a way.

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  • Feb, 3 2026

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