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

India’s cryptocurrency ecosystem has evolved from regulatory ambiguity to structured oversight. Cryptocurrencies are now categorised as Virtual Digital Assets (VDAs) under the Income Tax Act, 1961. This means they are legal to buy, sell, hold, and trade, but are not recognised as legal tender.

The industry continues to expand under closer regulatory scrutiny, with more than 107 million Indians actively participating in crypto trading.

 This comprehensive guide explores India’s crypto regulations, covering anti-money laundering (AML) compliance, taxation, reporting requirements, and future developments. It equips investors and traders, especially those using Giottus, to navigate the evolving landscape confidently.

Legal Status of Cryptocurrencies in India

Cryptocurrencies in India exist in a regulated yet evolving framework. They are permitted for trading, investment, and holding but cannot be used as legal tender. 

The turning point came in 2020, when the Supreme Court overturned the Reserve Bank of India’s (RBI) 2018 banking restriction and restored banking access to crypto exchanges. VDAs now include cryptocurrencies, non-fungible tokens (NFTs), and other digital assets under the regulatory purview of tax and AML authorities.

While India does not yet have a comprehensive crypto law, the shift from prohibition to regulation is evident. The proposed 2021 ban bill was dropped, signalling a preference for governed innovation rather than restriction.

Investors are advised to trade via FUI-registered, compliant platforms like Giottus, ensuring safe and legitimate participation.

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

Role of FIU, RBI

India’s crypto ecosystem is monitored by multiple agencies working in coordination to ensure stability and transparency:

1. Reserve Bank of India (RBI): RBI does not directly oversee or regulate crypto. However, RBI oversees monetary stability of the country and views private cryptocurrencies as high-risk assets. It promotes the Digital Rupee (e-Rupee), a state-backed alternative for secure digital payments.
2. Financial Intelligence Unit – India (FIU-IND): Enforces AML and Counter-Financing of Terrorism (CFT) rules under the Prevention of Money Laundering Act (PMLA).
3. Central Board of Direct Taxes (CBDT): Handles crypto taxation, introducing the Schedule VDA for detailed reporting in Income Tax Returns (ITR).
4. Union Ministry of Finance: Develops the apex policy framework.

This collaborative regulatory structure strengthens investor protection while encouraging responsible innovation in platforms such as Giottus, which comply with national standards.

AML and KYC Compliance Under PMLA

VDAs fall under the PMLA since March 2023. This means crypto platforms are now treated as “reporting entities.” They must:

1. Verify user identities using PAN or Aadhaar.
2. Monitor transactions for suspicious activity.
3. Comply with the FATF Travel Rule, sharing sender and receiver information on transfers.

There is no minimum threshold for reporting suspicious activity, ensuring thorough oversight.

Investors should always use registered and compliant exchanges like Giottus, which fully adhere to PMLA norms, safeguarding user funds and ensuring transparency.

Taxation of Cryptocurrencies

India’s crypto taxation regime, among the most stringent globally, remains unchanged in the 2025 Union Budget.

1. Flat 30% tax (plus 4% cess) applies on profits under Section 115BBH, with no deductions allowed for expenses like transaction fees. (Introduced in the 2022 Union Budget).
2. Losses from crypto cannot be offset or carried forward.
3. A 1% TDS applies to transfers over ₹50,000 (₹10,000 in some cases), deducted on the full transaction value.
4. GST at 18% applies to crypto-related services such as trading or staking fees.

On Giottus, these deductions and TDS obligations are managed seamlessly, helping users maintain compliance with Indian tax laws.

For a complete breakdown of how these taxes apply to investors and traders, see: Crypto Tax India: 2025 Comprehensive Guide

Reporting Crypto Income in ITR

Filing crypto income is now mandatory in India. For the Financial Year 2024–25 (Assessment Year 2025–26), investors must disclose transactions under Schedule VDA.

Depending on the nature of activity:

1. Use ITR-2 for capital gains, or
2. ITR-3 for business income (e.g., mining or staking).

Each transaction must detail the date of acquisition, sale, and corresponding value. Deadlines are:

1. 31 July (non-audit cases)
2. 31 October (audit cases)
3. 31 December (belated filings)

Non-reporting can trigger penalties or notices. Giottus users benefit from clear transaction histories, simplifying tax filing and compliance.

For step-by-step instructions, refer to:  Crypto in ITR: How to File Crypto Trading, F&O, and Gift Income

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The Digital Rupee: A Sovereign Alternative

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

Integrated with UPI, it enables fast, traceable payments for retail and wholesale transactions. Unlike private cryptocurrencies, the e-Rupee carries no volatility risk and is fully backed by the RBI. This offers a regulated digital alternative.

While it currently coexists with private VDAs traded on platforms like Giottus, the e-Rupee demonstrates India’s growing commitment to digital innovation in finance.

Future Outlook: Towards a Comprehensive Framework

India’s regulatory approach in 2025 is evolving toward clarity and structure.

A June 2025 discussion paper introduced the idea of asset classification (security, commodity, or currency) and licensing requirements for exchanges. The Crypto Assets Regulatory Authority (CARA) proposed under the COINS Act 2025 aims to centralise oversight and harmonise tax and AML frameworks.

Additionally, India is aligning with global standards like the OECD’s Crypto-Asset Reporting Framework (CARF) and may adopt EU-style MiCA regulations for better investor protection.

Experts foresee no outright ban, but a balanced regulatory environment that promotes innovation while protecting users. For Indian investors, this marks an opportunity to grow within a more transparent and compliant market, especially when using regulated exchanges like Giottus.

Practical Tips for Compliance and Investment

To navigate India’s regulatory environment effectively:

• Trade Responsibly: Use Giottus, an FIU-registered, compliant platform for safe crypto trading.
• Maintain Records: Keep transaction details, including acquisition costs and sale dates, for tax and reporting.
• Stay Updated: Follow updates from the RBI, SEBI, and Ministry of Finance.
• Leverage Giottus Tools: Giottus provides transaction summaries and analytics for effortless ITR filing.
• Seek Professional Advice: Consult qualified tax professionals for personalised portfolio strategies.

India’s crypto regulations in 2025 signify a shift from uncertainty to structured governance. With a growing investor base and improved regulatory coordination, the ecosystem is entering a mature phase of compliance and innovation.

By adhering to PMLA, taxation, and reporting rules and by trading securely on Giottus investors can thrive in this dynamic market while staying fully compliant.

 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.