The big picture
India's crypto framework is best described as a tax-and-AML regime rather than a comprehensive market regime. There is no formal licensing system for crypto exchanges yet; instead, exchanges operate as reporting entities under the Prevention of Money Laundering Act (PMLA), with FIU-IND oversight. A 30 percent tax and a 1 percent TDS were introduced in 2022 and structurally reshaped the domestic market. A broader regulatory framework is debated but not yet in force, and the policy stance has fluctuated.
This is an educational overview, not legal advice. Rules continue to evolve and the regulatory shape can change with each budget cycle.
Who the regulators are
Multiple authorities have roles in India's crypto setup. The Ministry of Finance sets tax policy and crypto policy direction. The Reserve Bank of India (RBI) handles monetary policy and remains cautious about retail crypto exposure; it has at times restricted banking access. The Securities and Exchange Board of India (SEBI) covers securities-like activities. The Financial Intelligence Unit India (FIU-IND) enforces the PMLA reporting regime for crypto firms. There is currently no single "crypto regulator" with a dedicated mandate.
What is regulated
Several pieces are in place even without a comprehensive law:
- Tax. A flat 30 percent on virtual digital asset gains, with no offsets against other income and no deduction other than acquisition cost. Plus a 1 percent TDS on most transfers above a small threshold.
- AML / PMLA. Since 2023, crypto exchanges, custodians and similar providers are reporting entities under the PMLA, requiring KYC, transaction monitoring and reporting to FIU-IND.
- Foreign exchanges. FIU-IND ordered several foreign crypto exchanges to register or comply with Indian AML rules, with non-compliance leading to blocks on access from India.
- Securities. If a token has securities-like characteristics, SEBI rules may apply.
Practical implications for users and businesses
For Indian residents, the practical reality is shaped by tax. The 30 percent flat rate plus 1 percent TDS makes high-frequency trading expensive; many users hold rather than trade actively. Indian-registered exchanges have built compliant flows; some users still use foreign platforms via informal access, which carries significant legal and operational risk.
For businesses, India is a large but constrained market. Operating as a reporting entity under PMLA requires meaningful compliance investment. Many global firms either built India-specific operations or scaled back retail-facing services pending regulatory clarity. The market remains attractive due to its size and adoption, but predictability is lower than in jurisdictions with comprehensive frameworks.
On tax, the 30 percent rate and 1 percent TDS are settled features, debated but in force. The Income Tax Department's guidance has been refined over multiple budget cycles. The implementation of TDS — including who is responsible for deducting and depositing — has direct operational impact on exchanges. Specific situations should be confirmed with a qualified tax professional.
What is changing
The Indian crypto policy debate continues. A comprehensive framework has been promised at various points; whether and when it lands is uncertain. The RBI's digital rupee work — see what are CBDCs — is a separate track. International coordination through the G20 and FATF also influences the direction.
Compared with the European Union's MiCA — see what is MiCA — India is at an earlier stage of formalisation but already enforces meaningful tax and AML obligations. Compared with the SEC framework — see SEC crypto regulation — India operates without a primary crypto regulator and relies on tax + AML + general financial laws.
Follow Indian crypto policy as it moves
India's crypto policy moves on Ministry of Finance announcements, budget speeches, FIU-IND orders and occasional RBI statements. Major shifts often follow international coordination and parliamentary debate. Zippfeed surfaces Indian crypto headlines with sentiment and importance scoring so you can tell which updates are routine and which will change what is available, how it is taxed and what protections apply. This is education, not financial or legal advice — but informed beats surprised every time.
