Is Crypto Regulated in India? Tax Rules, Legal Status, and What You Need to Know in 2025
Crypto is legal in India in 2025, but heavily taxed. Learn about the 30% crypto tax, 1% TDS, government tracking, and what you must report to avoid penalties.
VDA Tax India: What You Need to Know About Crypto Tax Rules in India
When you buy, sell, or trade cryptocurrency in India, the government treats it as a Virtual Digital Asset, a category of digital property subject to specific tax rules under India’s Income Tax Act. Also known as VDA, this includes Bitcoin, Ethereum, memecoins, and NFTs—anything that isn’t physical money but holds value digitally. Since April 2022, India has required everyone who trades or earns crypto to report it, and the tax hit is steep: 30% on profits, no deductions, and no offsetting losses against other income.
What makes VDA tax in India different from regular capital gains? For starters, you can’t reduce your taxable profit by claiming trading fees, gas costs, or even losses from other crypto trades. If you bought Ethereum for $5,000 and sold it for $8,000, you owe 30% on the $3,000 gain—even if you lost $10,000 on other coins that year. The 1% TDS, a withholding tax deducted at source on every crypto transaction over ₹50,000 (or ₹10,000 in a single day) adds another layer. Exchanges like WazirX or CoinDCX automatically take this out, but if you trade peer-to-peer, you’re still responsible for paying it. And if you receive crypto as a gift, bonus, or airdrop? That’s also taxable at your full income tax rate.
India’s tax system doesn’t care if you’re a casual holder or a full-time trader. Even small sales—like swapping one memecoin for another—are taxable events. The IRS-style reporting, where the government now demands transaction data from exchanges under the new 2025 rules means your trading history is being tracked. If you skip filing, penalties can hit up to 200% of the unpaid tax, plus possible criminal charges for deliberate evasion. This isn’t theoretical: in 2024, the Indian Income Tax Department flagged over 120,000 crypto users for non-compliance.
Below, you’ll find real cases, scams, and tax traps tied to crypto in India and beyond. From how unlicensed mining in Iran steals power to how FATCA affects US citizens holding crypto, these posts show the global consequences of ignoring digital asset rules. You’ll see what happens when people treat crypto like cash without understanding the tax engine behind it. Whether you’re holding Solana memecoins, trading on Uniswap, or chasing airdrops, the VDA tax rules in India don’t bend for hype. Know your obligations—or pay the price.