Crypto Restrictions in India: What You Need to Know About Trading, Taxes, and Bans

When it comes to crypto restrictions in India, a complex mix of regulatory uncertainty, tax rules, and unofficial bans that have shaped how Indians interact with digital assets since 2018. Also known as India’s crypto crackdown, this isn’t a full ban—but it’s close enough to make holding or trading crypto feel like walking through a minefield.

Unlike countries that outright banned crypto, India never passed a law saying Bitcoin or Ethereum are illegal. But from 2018 to 2020, banks were told to cut off services to crypto exchanges. That caused chaos. Even after the Supreme Court overturned the banking ban in 2020, the government kept pushing back. By 2022, they slapped a 30% tax on all crypto gains—with no deductions for losses. That’s higher than stocks, real estate, or gold. And if you earn crypto from staking or airdrops? That’s also taxable income. The crypto tax India, a flat 30% rate on profits plus 1% TDS on every trade. Also known as crypto income tax India, it’s designed to discourage speculation, not support innovation.

Then there’s the India crypto ban, not a legal prohibition, but a de facto freeze on mainstream adoption. Banks still hesitate to work with crypto firms. Payment processors like Razorpay and Paytm pulled support. Many exchanges stopped offering INR deposits. Even though the Reserve Bank of India hasn’t made a formal ban, the message is clear: they want you to use the digital rupee instead. And if you’re trying to use P2P platforms like Binance or OKX? You’re still allowed—but you’re on your own if something goes wrong. No legal recourse. No consumer protection. Just risk.

And here’s the twist: the government doesn’t want you to ignore crypto. They want you to pay taxes on it. That’s why they track transactions through KYC-heavy exchanges and demand reports from platforms. If you bought Bitcoin in 2021 and sold it in 2024, the tax department already knows. They’re not chasing small traders—but if you’re moving big amounts, they’re watching. The crypto regulation India, a patchwork of tax rules, banking pressure, and vague warnings from officials. Also known as Indian crypto policy, it’s less about stopping crypto and more about controlling it.

What does this mean for you? If you’re holding crypto in India, you’re not breaking the law—but you’re operating in a space with no safety net. You can’t open a crypto savings account. You can’t get a crypto-backed loan from a bank. You can’t use it to pay for groceries. And if you’re trying to cash out, you’re stuck with high fees and long waits. The crypto trading India, still happens, mostly through P2P and offshore exchanges. Also known as Indian crypto market, it survives despite the headwinds because demand never died.

Below, you’ll find real stories from people who’ve been caught in this system—some lost money to fake exchanges, others paid taxes they didn’t understand, and a few found loopholes that actually worked. No fluff. No guesses. Just what’s real, what’s risky, and what you need to do next.