Indian crypto regulations: What you need to know about taxes, transfers, and compliance

When it comes to Indian crypto regulations, the official rules set by India’s government and tax authorities for buying, selling, and moving digital assets. Also known as crypto laws in India, they don’t ban cryptocurrency—they just make sure you pay your share and don’t hide money overseas. Unlike countries that outright ban crypto, India treats digital assets as Virtual Digital Assets (VDAs), a legal category created in 2022 to tax crypto gains, NFT sales, and staking rewards under income tax rules. This means if you bought Bitcoin in 2021 and sold it for profit in 2024, you owe 30% tax on that gain—no deductions, no losses offset.

The real challenge isn’t the tax rate—it’s FEMA compliance, India’s Foreign Exchange Management Act, which controls how money flows in and out of the country. If you want to send crypto to a foreign exchange, wallet, or family member abroad, you’re technically moving value outside India. That triggers FEMA rules. You need to declare the transaction, prove it’s not money laundering, and show you’ve paid the right taxes. Many people try to bypass this with P2P trades or stablecoin transfers, but the government tracks wallet addresses and exchange data. There’s no legal gray zone—just consequences for getting caught.

What’s interesting is how people adapt. Some use offshore exchanges like Binance or Kraken, but only after filing their tax returns and keeping records. Others hold crypto in Indian wallets, sell it to local buyers, and transfer INR to a foreign bank account through legal channels like wire transfers with proper documentation. A few even move to countries with better crypto rules—like the UAE or Portugal—and take their holdings with them, legally.

Scams thrive where rules are confusing. Fake airdrops, unregulated Indian exchanges, and "crypto tax advisors" promising zero tax are everywhere. The truth? If you made money, you owe tax. If you moved crypto abroad without reporting, you risk penalties. The government doesn’t need to prove you’re hiding millions—they just need to see one unreported transaction to start an audit.

Below, you’ll find real stories and practical guides from traders who’ve navigated these rules. Some lost money trying to skip taxes. Others found legal ways to move crypto overseas. You’ll see what works, what doesn’t, and what the authorities are watching right now. No theory. No fluff. Just what’s happening on the ground in India’s crypto scene.