India has no full crypto market law yet. What applies today is a 30% tax, a 1% deduction at source and anti-money-laundering registration, and the authorities are enforcing the last one.

India crypto tax rules have moved into a new law this year, but the burden on investors has not changed: gains from virtual digital assets (VDAs) are taxed at a flat 30%, and losses can’t be used to cut that bill. Separately, platforms serving Indian users must register with the Financial Intelligence Unit–India (FIU-IND), which on 9 Sep issued non-compliance notices to 15 that had not.

Here is what is law today, what it means for you, and what is still only a recommendation.

This explainer is general information, not tax advice. Check your own position with a qualified tax professional or the Income Tax Department.

What the rule says

From 1 Apr 2026, the Income-tax Act, 2025 replaced the 1961 Act. The VDA rules that sat in Section 115BBH and Section 194S of the old Act now sit in Section 194 and Section 393 of the new one. Section 194 sets a 30% rate on “any income from the transfer of any virtual digital asset”, and adds:

“No deduction in respect of any expenditure (other than cost of acquisition, if any) or allowance or set off of any loss shall be allowed…” (Income-tax Act, 2025, s. 194)

The same section says a loss from transferring a VDA can’t be set off against other income or carried forward to later years. VDAs include cryptocurrencies and NFTs.

The 1% tax deducted at source (TDS) on VDA transfers, formerly Section 194S, now sits in Section 393(1). On an Indian exchange, the platform deducts it before crediting your sale proceeds. In a peer-to-peer trade, the buyer is responsible for deducting it.

What India crypto tax means for you

Worked examples (illustrative figures, in rupees, before any surcharge and cess)

  • A simple gain. You buy tokens for ₹1,00,000 and sell them for ₹1,50,000. Your taxable income is ₹50,000, and the tax at 30% is ₹15,000. Exchange fees can’t be deducted; only the purchase cost can.
  • A gain and a loss in the same year. You make ₹70,000 on one token and lose ₹50,000 on another. Under the rule as tax practitioners read it, the loss can’t be set off, so tax is due on the full ₹70,000: ₹21,000.
  • TDS on a sale. You sell tokens for ₹2,00,000 on an Indian exchange. The exchange deducts 1%, or ₹2,000, and pays you ₹1,98,000. That ₹2,000 is a credit against your final tax bill, not an extra tax, so keep the TDS statement.

Why it matters: a flat 30% rate with no loss relief, plus a deduction on every sale, makes frequent trading expensive. That shapes whether Indian volume stays on local platforms or moves offshore.

FIU-IND registration (not a licence)

Since March 2023, VDA service providers have been brought under India’s Prevention of Money Laundering Act (PMLA). Platforms that exchange VDAs for rupees, transfer VDAs or hold them for customers must register with FIU-IND as reporting entities and meet record-keeping and reporting duties. The release says these obligations “are not contingent on physical presence of the entity in India”, so offshore platforms serving Indian users are covered too.

Registration is a compliance status. It does not mean the government has approved a platform’s products, tokens or leverage.

On 9 Sep, FIU-IND issued notices under Section 13 of the PMLA to 15 platforms it said were not compliant, including Weex, Blofin, Bitunix, DigiFinex, Toobit, XT.com, WOO X, Pionex and WhiteBIT, according to the Press Information Bureau release. It also issued notices seeking the takedown of their apps and URLs for public access in India, under Section 79(3)(b) of the Information Technology Act. The Block and Crypto Times reported the same list.

Why it matters: enforcement is moving faster than legislation. If an app you use is on the list, access from India may be blocked, and withdrawing funds could become harder.

What’s still unclear

  • A market law. A parliamentary finance panel has been preparing recommendations on VDAs that may include tighter monitoring of transactions, The Economic Times reported. Recommendations are not statutes. Caveat: don’t read a committee draft as an overnight ban or an overnight legalisation.
  • TDS thresholds under the new Act. The old Section 194S exempted small annual totals (₹10,000 for most payers, ₹50,000 for some individuals). Tax commentators disagree on whether and how those thresholds carry over into Section 393. Check the current Central Board of Direct Taxes guidance before relying on either reading.
  • Old-Act transactions. Sales made before 1 Apr 2026 are still assessed under the 1961 Act.

A practical checklist

  • Check that an Indian on-ramp appears on FIU-IND’s list of registered reporting entities, and use the official FIU-IND source rather than a third-party copy.
  • Keep records of purchase cost for every sale; you will need them for the 30% computation.
  • Download your TDS statements so the credits match your return.
  • Treat “no KYC, no TDS” offshore offers as a compliance risk, not a feature.

Asia readers: India’s path so far is “tax and anti-money-laundering first, market structure later”, the opposite sequence from the EU’s licensing-led MiCA.

This article was written by Kavya Raghunathan, an AI author persona at CryptoWatchDesk, and was reviewed, fact-checked and edited by Akriti Seth. It is not investment advice. Kavya Raghunathan holds no crypto assets.