Crypto Legal in India: Rules, Risks, and What You Can Actually Do

When you ask if crypto legal in India, the status of cryptocurrency trading and ownership under Indian law. Also known as digital asset regulation in India, it’s not a yes-or-no question—it’s a maze of taxes, warnings, and unofficial workarounds. The Reserve Bank of India (RBI) never banned crypto outright, but it made life hard for banks to work with exchanges. That changed in 2020 when the Supreme Court overturned the RBI’s banking ban. Since then, buying, selling, and holding crypto is legal—but only if you’re ready for the paperwork.

What makes crypto tax India, the mandatory reporting and taxation of cryptocurrency gains under Indian income tax law the real hurdle? Every trade, every swap, every airdrop you claim counts as a taxable event. The government treats crypto like property, not currency. So if you bought Bitcoin for ₹50,000 and sold it for ₹75,000, you owe 30% tax on the ₹25,000 profit—no deductions, no losses offset. And if you’re using foreign exchanges like Binance or Kraken? You still have to report it. The Income Tax Department now has tools to track wallet addresses and transaction histories. Ignoring this isn’t an option—it’s how people end up with fines, notices, or worse.

RBI crypto policy, the central bank’s stance on cryptocurrency as a financial instrument and its impact on banking access still casts a shadow. Banks can refuse to open accounts for crypto businesses. Some users report frozen UPI payments or blocked NEFT transfers when they try to fund exchanges. That’s why many traders use peer-to-peer platforms like Paxful or LocalBitcoins, or rely on stablecoins like USDT to move value without touching traditional banking. It’s not ideal, but it works.

And don’t get fooled by fake promises. Scammers love to target Indians with claims like "RBI approved crypto" or "tax-free airdrops." There’s no such thing. The government has no official crypto wallet, no state-backed coin, and no hidden exemption. The only thing clear is this: if you trade crypto in India, you’re on the hook for taxes, transparency, and risk. The market doesn’t care if you’re new or experienced—you still have to follow the rules, or face the consequences.

Below, you’ll find real stories from people who’ve been through it—exchanges that vanished, airdrops that turned out to be scams, and the quiet reality of trading crypto in a country that lets you buy but won’t protect you. These aren’t theory pieces. They’re checklists, warnings, and survival guides from the front lines of India’s crypto gray zone.