Crypto Asset Regulation in India: What You Need to Know Now

When it comes to crypto asset regulation in India, the government treats digital assets as taxable property, not currency, with strict reporting and high tax rates that shape how people hold and trade them. Also known as Virtual Digital Asset (VDA) rules, this framework doesn’t ban crypto — it just makes it expensive and complicated to use. Unlike countries that ban crypto outright or offer tax-free zones, India walks a tightrope: millions trade daily, but every transaction carries a 30% tax on profits, a 1% TDS deduction on every trade, and 18% GST on exchange fees. The rules aren’t designed to stop crypto — they’re built to extract revenue from it.

This system directly affects non-custodial wallet India, self-managed wallets where users hold their own keys without relying on exchanges. There’s no official ban on these wallets, but the tax system makes them risky. If you send crypto from a non-custodial wallet to an exchange, you still owe tax. If you don’t report it, you’re on your own if the tax department asks for records. Most people avoid using non-custodial wallets for daily trading because there’s no easy way to prove where your coins came from — and the penalty for mistakes is steep. Meanwhile, India crypto tax, the 30% capital gains tax applied to every crypto profit, no matter how small, has become the real gatekeeper. It’s not about legality — it’s about cost. You can legally own Bitcoin, Ethereum, or any token, but if you sell it for more than you paid, the government takes nearly a third before you even see the rest.

What’s surprising is that despite these rules, India leads the world in crypto adoption. People still use it for remittances, to protect savings from inflation, and to access global markets that banks won’t touch. The VDA tax India, the official term for how crypto gains are taxed under Indian law, is harsh — but not enough to stop demand. Many traders treat crypto like a high-risk investment, not a currency, and accept the tax as the price of entry. Others use P2P platforms to avoid exchange fees, but even those transactions are tracked through bank deposits and flagged for TDS. The result? A crypto ecosystem that’s alive but tightly controlled — where users adapt, not resist.

Below, you’ll find clear breakdowns of what’s real and what’s rumor. We cover how wallet rules actually work, why the 30% tax isn’t going away, what happens if you don’t report, and how people are still making it work — legally — despite the system. No fluff. Just what you need to know before you trade, hold, or move crypto in India.