Is crypto legal in India in 2026?

Where things stand

• Legal to own and trade. No law prohibits individuals from holding or trading crypto.
• Not legal tender. Crypto is not money issued or backed by the state. India's official digital currency is the RBI's e-rupee, which is a separate thing.
• Taxed as a "virtual digital asset" (VDA). Gains are taxed at a flat 30% plus cess, losses can't be set off, and a 1% TDS applies on transfers above set thresholds.
• Exchanges are reporting entities. Crypto service providers serving Indians must register with the Financial Intelligence Unit (FIU-IND) and follow anti-money-laundering rules.

The timeline that got us here

1. April 2018 — RBI banking curbs. The Reserve Bank told the entities it regulates (banks, payment firms) to stop dealing in or servicing "virtual currencies". RBI notification.
2. March 2020 — Supreme Court sets the curbs aside. In Internet and Mobile Association of India v. Reserve Bank of India (4 March 2020), the Court quashed the RBI circular as disproportionate, reopening banking access for exchanges.
3. 2022 — The tax regime arrives. The Finance Act, 2022 created the VDA category: a 30% tax on gains (section 115BBH, from 1 April 2022) and 1% TDS on transfers (section 194S, from 1 July 2022).
4. March 2023 — Anti-money-laundering law applies. A Finance Ministry notification brought VDA service providers under the Prevention of Money Laundering Act, 2002, which means KYC, record-keeping and reporting to FIU-IND.
5. December 2023 — Offshore exchanges targeted. FIU-IND issued show-cause notices to nine offshore exchanges operating without registration and asked MeitY to block their URLs. PIB release.
6. April 2026 — New Income-tax Act. The Income-tax Act, 2025 took effect on 1 April 2026 and defines VDAs in the statute itself. PIB explainer. The 30% rule and 1% TDS carry over under new section numbers (194 and 393, respectively), and a new exchange-reporting framework (section 509) applies from calendar year 2026, as summarised by Mint.

What this means for your money

The practical risk in India is less about legality and more about cost and compliance. A worked example: buy ₹1,00,000 of bitcoin, sell for ₹1,50,000. The ₹50,000 gain attracts 30% tax plus 4% cess, ₹15,600 in total, regardless of how long you held it. A ₹20,000 loss on another coin in the same year does not reduce that bill. Try your own numbers in our India crypto tax calculator.

Using an unregistered offshore exchange adds a different risk: the platform can be blocked, and Indian TDS and reporting obligations do not disappear. Compare registered options on our Indian exchanges page.

What is still unsettled

India has no comprehensive crypto statute covering licensing, investor protection or stablecoins. Until one is passed, the rules above (tax law plus anti-money-laundering law) are the framework. We update this page when anything official changes.