Crypto Regulations in India: All You Need to Know in 2025

The Indian crypto market has come a long way. What was once a confusing landscape of bans and uncertainty is now taking shape under structured regulations. Cryptocurrencies are recognised as Virtual Digital Assets (VDAs) under the Income Tax Act, 1961. This means you can buy, sell, hold, and trade crypto safely, though they’re not legal tender like the rupee.

Today, over 107 million Indians are active in crypto trading. Platforms like Giottus make it simple to navigate the rules, ensuring both security and compliance. Here’s a clear guide to crypto regulations in India, including taxation, AML compliance, reporting, and what the future may hold.

For an in-depth discussion of AML requirements, refer to our guide: India’s Crypto Regulations Under PMLA: Where We Stand in 2025

Legal Status of Cryptocurrencies in India

Cryptocurrencies in India are legal for investment and trading, but they are not legal tender. A key moment was in 2020, when the Supreme Court overturned the RBI’s 2018 banking restrictions. This allowed exchanges to reconnect with banks and resume operations.

VDAs include cryptocurrencies, NFTs, and other digital tokens. India doesn’t have a comprehensive crypto law yet, but the shift is clear: regulators prefer governed innovation over blanket bans. Proposed bans like the 2021 bill were dropped, signalling a more open approach.

Investors should stick to FIU-registered exchanges like Giottus for secure trading and compliance.

Role of FIU and RBI

Multiple agencies are now involved or partly involved in the crypto ecosystem. We cannot completely say that any of them is the exclusive regulator. However, the more appropriate aspect would be that these are key institutions that would have a say in the way any financial instrument develops and evolves in the country.

RBI – Monitors risks to the financial system. Promotes the Digital Rupee (e-Rupee) as a state-backed alternative to private crypto.

FIU-IND – Enforces AML and counter-terror financing rules under PMLA.

CBDT – Handles crypto taxation and reporting under Schedule VDA.

Ministry of Finance – Sets policy direction.

This collaboration ensures stability while letting platforms like Giottus operate safely.

AML and KYC Compliance Under PMLA

Since March 2023, crypto platforms are considered “reporting entities” under PMLA. That means they must:

Verify user identity with PAN or Aadhaar.

Monitor for suspicious transactions.

Follow the FATF Travel Rule, sharing details of sender and receiver on transfers.

Even small transactions can be monitored to prevent fraud. Exchanges like Giottus handle this automatically, giving users peace of mind.

Taxation of Cryptocurrencies

India’s crypto tax regime is strict but transparent:

30% tax + 4% cess on profits from crypto trading, mining, or staking, with no deductions.

Losses cannot be offset or carried forward.

1% TDS on transfers over ₹50,000 (₹10,000 in some cases).

GST 18% on services like trading or staking fees.

Using a platform like Giottus, these taxes are calculated automatically, simplifying compliance.

Reporting Crypto Income in ITR

Filing crypto income is now mandatory. For FY 2024–25 (AY 2025–26):

ITR-2 for capital gains

ITR-3 for business income (e.g., mining or staking)

You must report acquisition dates, sale dates, and values for each transaction. Key deadlines:

31 July – non-audit cases

31 October – audit cases

31 December – belated filings

Non-compliance can lead to fines. Giottus simplifies this with clear transaction histories.

The Digital Rupee: A Sovereign Alternative

The RBI’s e-Rupee, piloted since 2022 and expanded in 2025, is India’s Central Bank Digital Currency (CBDC).

Integrated with UPI, it allows instant, traceable payments for both retail and wholesale transactions. Unlike private crypto, it’s stable, regulated, and backed by the RBI. While it coexists with VDAs on platforms like Giottus, it provides a safe, government-backed digital payment option.

Future Outlook: Towards a Comprehensive Framework

India is steadily moving toward a clear, transparent crypto ecosystem:

A June 2025 discussion paper suggested classifying crypto assets as security, commodity, or currency.

The Crypto Assets Regulatory Authority (CARA) under the COINS Act 2025 may centralise oversight and unify tax and AML rules.

India is also aligning with global frameworks like OECD’s CARF and EU-style MiCA to protect investors.

Experts expect no outright bans, instead a regulated market that fosters innovation while protecting users. For investors, this is a chance to grow safely in a more structured environment.

Practical Tips for Compliance and Investment

Trade responsibly – stick to FIU-registered exchanges like Giottus.

Keep records – track acquisition costs, sales, and profits.

Stay updated – follow announcements from RBI, SEBI, and Ministry of Finance.

Leverage Giottus tools – get transaction summaries and tax reports easily.

Seek advice – consult qualified tax experts for personalised guidance.

India’s crypto regulations in 2025 show a market maturing into compliance and innovation. By trading responsibly, reporting accurately, and using regulated platforms like Giottus, investors can thrive while staying fully compliant.

The ecosystem has moved from uncertainty to structure, offering growth opportunities while keeping user protection at its core.
 

 Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.