Cryptocurrency Legal Status in India: Rules, Risks, and What’s Really Allowed

When it comes to cryptocurrency legal status in India, the government doesn’t ban crypto, but it makes using it feel like walking through a minefield. Also known as digital asset regulation in India, this isn’t about prohibition—it’s about control. You can buy, sell, and hold Bitcoin or Ethereum, but the state watches every move, taxes every gain, and pushes you toward centralized platforms that answer to regulators.

That’s where non-custodial wallet India, a wallet you fully control, like Ledger or Trust Wallet. Also known as self-custody crypto, it’s not illegal—but it’s practically sidelined. The government’s 30% tax on gains, plus a 1% TDS on every trade, makes using non-custodial wallets feel pointless for most people. Why risk a wallet that doesn’t report to the tax department when exchanges like CoinDCX or ZebPay already do it for you? The system isn’t designed to protect you—it’s designed to track you. And that’s why crypto exchanges India, the platforms you actually use to trade. Also known as Indian crypto platforms, have become the de facto gatekeepers. Exchanges like WazirX and Binance India got hit with fines and banking blocks because they didn’t comply with FIU-IND’s reporting rules. Now, only those that play nice—submitting KYC, transaction logs, and user data—are allowed to operate. Your crypto isn’t banned, but your freedom to use it privately? Gone.

What’s really changing in 2025?

India isn’t banning crypto—it’s forcing it into a box. The Indian crypto regulations, a mix of tax laws, compliance demands, and banking restrictions. Also known as crypto policy India 2025, are tightening. You can’t avoid the 30% capital gains tax, and if you transfer crypto to a non-custodial wallet, you’re flagged. The FIU doesn’t need proof of wrongdoing—just suspicion triggers an audit. Meanwhile, crypto tax India, the 30% tax on profits, plus 1% TDS on every trade. Also known as crypto income tax India, isn’t just a fee—it’s a deterrent. It turns casual traders into reluctant participants and pushes long-term holders into silence. The goal isn’t to kill crypto. It’s to make sure the government gets its cut, every single time.

Below, you’ll find real breakdowns of what’s allowed, what’s dangerous, and which exchanges are still standing after India’s crackdown. No hype. No guesswork. Just the facts on how to navigate crypto in India without getting flagged, fined, or locked out.