Indian Crypto Law: What You Need to Know

When navigating Indian crypto law, the set of rules that govern digital assets in India, covering trading, taxation, and compliance. Also known as India crypto regulations, it shapes how investors, exchanges, and developers operate in the country.

One core piece of this Regulatory framework, a mix of statutes, circulars, and advisory notes issued by Indian authorities

The Reserve Bank of India (RBI), India's central bank that issues guidance on cryptocurrency payments and financial stability

The Securities and Exchange Board of India (SEBI), the market regulator that oversees securities‑related crypto offerings and compliant tokenised assets

And Taxation, the income‑tax rules that dictate how crypto gains are reported and taxed in India

All these pieces interlock, so understanding each one helps you stay compliant and avoid costly mistakes.

Key Components of Indian Crypto Law

First up, the RBI has repeatedly warned that crypto is not legal tender, but it hasn’t outright banned trading. Instead, the central bank focuses on preventing illicit flows and ensuring that crypto transactions don’t bypass the banking system. This means most crypto exchanges need a clear link to a recognized bank, and they must follow Know‑Your‑Customer (KYC) and Anti‑Money‑Laundering (AML) checks.

Next, SEBI’s role has grown as tokenised securities and security‑linked tokens enter the market. SEBI requires any crypto‑related product that resembles a security to be registered, which pushes exchanges to obtain a specific licence if they want to list such assets. The result is a two‑track system: pure utility tokens stay under the broader crypto umbrella, while security‑type tokens fall under SEBI’s stricter oversight.

Taxation is where many Indian traders stumble. The Finance Ministry treats crypto gains as capital gains, and the rate depends on the holding period. Short‑term trades (held under 36 months) attract tax at the individual’s slab rate, while long‑term holdings enjoy a 20% flat rate. Additionally, a 1% TDS (Tax Deducted at Source) on crypto transactions above a certain threshold was introduced to improve compliance.

Exchange licensing is another hot spot. The government has drafted a comprehensive crypto‑exchange bill that would require every platform to register with the Financial Intelligence Unit (FIU) and meet capital and security standards. Until the bill passes, major exchanges operate under existing money‑service‑provider licences, but they must be ready for tighter scrutiny soon.

Finally, the legal landscape is still evolving. The draft bill, pending parliamentary review, could introduce a centralised crypto‑registry, stricter AML reporting, and possibly a framework for a digital rupee that co‑exists with private tokens. Keeping an eye on parliamentary debates and RBI circulars is essential for anyone active in the space.

So, whether you’re a casual trader, a developer building a DeFi app, or an exchange looking to expand, these building blocks of Indian crypto law give you a roadmap. Below you’ll find a curated set of articles that dive deeper into each area—exchange reviews, tax calculators, compliance checklists, and the latest updates on upcoming legislation. Use them to sharpen your strategy and stay ahead of the regulatory curve.