India

No dedicated crypto statute (as of mid-2026). India has not enacted dedicated crypto-asset legislation despite multiple legislative drafts circulated since 2018. The current framework is a patchwork of: tax law amendments (Finance Act 2022 introducing the 30% tax + 1% TDS); PMLA amendments (March 2023 extending the Act to VDA service providers); and RBI guidance / press releases on banking-sector engagement.

FIU-IND registration framework (March 2023). PMLA was amended in March 2023 to include virtual-digital-asset (VDA) service providers as reporting entities. FIU-IND registration is now mandatory for entities engaged in: exchange of VDAs for fiat or other VDAs; transfer of VDAs; safekeeping / administration of VDAs; participation in / provision of services connected to issuance and sale of VDAs.

FIU-IND enforcement (2023-2024). FIU-IND issued enforcement notices to major offshore crypto exchanges (Binance, OKX, Kraken, others) requiring registration to continue serving Indian customers. Several offshore exchanges geo-blocked Indian users or registered with FIU-IND in response. The enforcement substantially shifted the market structure toward FIU-registered operations.

RBI banking-sector posture. The RBI has remained sceptical of crypto, with public statements emphasising financial-stability and consumer-protection concerns. The RBI's 2018 effective banking ban on crypto was struck down by the Supreme Court of India (March 2020) on constitutional grounds; subsequent RBI guidance has been more cautious but has not blocked banking-sector engagement with FIU-registered exchanges.

FIU-IND registration. VDA service providers must register with FIU-IND under PMLA. Registration covers: customer identification (KYC); ongoing transaction monitoring; suspicious-transaction reporting; recordkeeping; appointment of a Principal Officer and Designated Director. Registration is administrative — it is not a substantive licence — but operation without registration creates substantial enforcement risk.

Banking-sector access. Even FIU-registered exchanges face challenges accessing banking services in India. RBI press communications have urged commercial banks to take additional risk-management steps when servicing crypto-business customers; some Indian banks have refused to bank crypto exchanges as a result. The market has adapted via partnered banks and offshore-banking arrangements.

No central licensing regime. Unlike most major jurisdictions, India does not have a central licensing regime for crypto exchanges. FIU-IND registration provides AML oversight; substantive regulation (capital, custody, conduct of business) is largely industry-led or absent. Proposals to introduce a substantive licensing framework have circulated but have not been enacted.

No formal stablecoin framework. India does not have a dedicated stablecoin regulatory framework. USD-denominated stablecoins are traded on Indian exchanges as VDAs under the standard PMLA + tax framework. INR-pegged stablecoin issuance has been limited; the absence of dedicated INR-stablecoin rules + RBI scepticism has limited issuance.

Digital Rupee (e₹). RBI launched the Digital Rupee CBDC in pilot phase (wholesale December 2022; retail December 2022). The e₹ is now in broader retail rollout as of 2025-2026 across major banks; transaction volumes remain small relative to UPI and other established payment rails. The Digital Rupee is the primary government-supported digital-currency offering.

30% flat tax on VDA gains (Section 115BBH). Finance Act 2022 introduced a flat 30% tax on income from transfer of any virtual digital asset, effective April 1, 2022. The rate applies regardless of holding period (no long-term / short-term distinction) and regardless of total income (no exemption threshold).

1% TDS on transactions (Section 194S). A 1% tax-deducted-at-source applies to VDA transactions above ₹10,000 per year, effective July 1, 2022. The TDS is collected at source by the exchange or counterparty and is creditable against the annual 30% tax liability. The 1% TDS has been controversial — it substantially affects market liquidity and trader behaviour and was a primary driver of P2P migration to offshore exchanges.

No loss offset. Section 115BBH explicitly prohibits offsetting VDA losses against other heads of income, and prohibits carrying VDA losses forward to subsequent years. Losses on one VDA cannot even offset gains on another VDA. This treatment is among the most-punitive crypto tax frameworks globally.

Mining, staking, airdrops. Mining income, staking rewards, and airdrops fall within Section 115BBH's 30% flat-tax framework when the resulting tokens are subsequently disposed. Receipt itself may also trigger income recognition under broader principles. Detailed guidance has been progressively published.

This is general background, not tax advice. Indian crypto tax matters are facts-specific and subject to ongoing CBDT clarifications. Consult an India-qualified Chartered Accountant for personal matters.

PMLA framework. VDA service providers are reporting entities under PMLA following the March 2023 amendments. Customer due diligence, ongoing monitoring, suspicious-transaction reporting to FIU-IND, and recordkeeping are mandatory. PMLA compliance is the most-substantive ongoing regulatory obligation for Indian crypto operators.

Travel Rule. India has been progressing Travel Rule implementation under FIU-IND guidance; full implementation is being phased through 2024-2025. Originator and beneficiary information requirements for crypto transfers are progressively being enforced.

Sanctions framework. India implements UN-mandated sanctions; autonomous Indian sanctions are limited compared to US / EU. Cooperation with the broader Western sanctions regime on Russia post-2022 has been measured. FIU-registered exchanges screen against the UN consolidated sanctions list.

No dedicated consumer-protection framework. India does not have a dedicated consumer-protection framework for crypto activities. General Consumer Protection Act 2019 and Information Technology Act 2000 provisions apply but are not crypto-specific.

SEBI engagement. The Securities and Exchange Board of India (SEBI) has engaged on tokenised-securities matters but has not extended substantive crypto-trading regulation. SEBI's posture on crypto has been measured pending broader legislative direction.

Self-regulatory bodies. Industry self-regulatory bodies (Bharat Web3 Association and others) have been the primary source of practical consumer-protection norms in the absence of dedicated regulation. Major Indian exchanges have generally adopted comparable AML / KYC / disclosure standards via industry coordination.

FIU-IND data flows. Registered VDA service providers report customer transaction data to FIU-IND. The data infrastructure is progressively maturing; cross-VASP data analysis capability has been developing.

Income Tax Department data access. ITD receives data from FIU-IND-registered exchanges supporting tax-compliance enforcement. The 1% TDS framework provides routine visibility into VDA transaction activity at source.

OECD CARF. India has committed to OECD CARF implementation on the standard 2027-2028 timeline. Implementation will materially enhance cross-border data visibility for Indian tax authorities.