India’s 2025 Crypto Regulations: The Bull Market’s Next Frontier or Regulatory Roadblock?
New Delhi finally lays its cards on the table. After years of regulatory limbo, India's 2025 cryptocurrency framework hits the streets—and the market's holding its breath.
### The Rulebook Drops
Forget the speculation. The Reserve Bank of India (RBI) and the Securities and Exchange Board (SEBI) have co-authored a playbook that defines digital assets, classifies tokens, and sets up licensing gates for exchanges. It's not a blanket ban, but it's far from a free pass. Compliance just became the only game in town.
### What's In, What's Out
The regulations draw a bright line. Utility tokens with clear, functioning ecosystems get a green light—think project-specific governance or access tokens. Securities? They're getting the traditional treatment, full stop. The gray area for memecoins and purely speculative assets shrinks to almost nothing. The message is clear: substance over hype.
### The Exchange Squeeze
Operating an exchange now means jumping through regulatory hoops that would make a legacy banker blush. KYC/AML protocols are non-negotiable. Data localization mandates force international players to build out Indian server infrastructure. Quarterly proof-of-reserves audits become mandatory. It’s a costly barrier to entry that will separate the serious operators from the fly-by-nights.
### Tax Man Cometh (Again)
The infamous 30% tax on crypto gains isn't going anywhere. But the 2025 framework adds a new twist: a 1% TDS (Tax Deducted at Source) on every transaction, enforced at the exchange level. It’s a liquidity siphon designed to track every rupee—and a not-so-subtle disincentive for the day traders who fueled the last bull run. Some old-school financiers are probably smirking at the irony: the 'rebel' asset class now has more transaction tracking than the stock market.
The framework is a double-edged sword. It grants legitimacy and could attract institutional capital that's been waiting on the sidelines. But it also imposes a structure that cuts against crypto's decentralized ethos. India hasn't killed its crypto scene—it's just sent it to finishing school. Whether that creates a mature investment landscape or stifles the very innovation that made crypto compelling remains the trillion-rupee question.
India has emerged among the top 10 countries globally for crypto transactional use, according to the World Crypto Rankings 2025 report by Bybit & DL Research. Crypto adoption in India is spreading fast beyond metro cities, both geographically and demographically.
The CoinSwitch 2025 report, based on 2.5 crore users, highlights that over 75% of crypto activity now originates from non-metro regions, Bitcoin has returned as the top asset with an 8.1% allocation, and XRP has witnessed one of the biggest jumps in trading. The market continues to be youth-led, with more women joining, particularly from Andhra Pradesh.
In an interview with CNBC, Binance CEO Richard Teng emphasized that India could become the next crypto superpower, driven by its young, tech-savvy population and active regulatory dialogue.
Below is a timeline of key crypto regulation updates in India during 2025.
Table of contents
- Crypto Regulation India Timeline – 2025
- July 7, 2025 : Bybit Imposes 18% GST
- June 2025 : Discussion paper on Cryptocurrency
- May 22, 2025 : FSB Peer Review Preparation
- April 1, 2025 : SEBI Oversight Begins
- February 13, 2025 : VDA Income Tax Amendment Bill Introduced
- February 10, 2025 : Crypto Exchanges Declared Reporting Entities
- Crypto Tax in India – 2025 (Fact-Checked)
- Crypto License in India
- India Leads Overall Institutional Strength in Crypto
- Crypto Adoption in India (2025 Snapshot)
- Conclusion
- FAQs
Crypto Regulation India Timeline – 2025
December 2025
- Coinbase Gets CCI Approval: Coinbase obtains clearance to acquire a minority stake in CoinDCX parent DCX Global.
- Calls for Tokenization Bill: MP Raghav Chadha urges the government to introduce a tokenization bill in India.
- RBI’s Stand on Bitcoin: RBI Deputy Governor T. Rabi Sankar states that Bitcoin has no intrinsic value and is purely speculative, likening it to tulip mania, while praising the blockchain technology behind it.
- Coinbase Reopens in India: Coinbase resumes user registrations in India and plans to launch an INR-to-crypto fiat ramp in 2026.
- Push for Regulatory Clarity: MP Dr. K Laxman advocates for clear crypto and Web3 regulations to curb innovation drain.
October 2025
Government on Sovereign Crypto: Commerce Minister Piyush Goyal confirms that the government does not encourage cryptocurrencies without sovereign or asset backing. Plans include introducing an RBI-backed digital currency, akin to US stablecoins, to eventually replace normal currency.
July 7, 2025: Bybit Imposes 18% GST
Bybit imposed an 18% GST on all crypto transfers of – spot and margin trading, derivatives, fiat-related transactions, withdrawals, and stakings. Additionally, it also launched the termination of some legacy products and services on July 9, 2025.
June 2025: Discussion paper on Cryptocurrency
The Indian government planned to release a discussion paper to establish a regulatory framework for crypto in India. The initiative also promised to seek public consultation on– stakeholders, including financial institutions, legal experts, crypto companies, and the general public.
May 22, 2025: FSB Peer Review Preparation
India gears up for the Financial Stability Board (FSB) review in October, aiming to align local crypto regulation with global regulatory standards.
April 1, 2025: SEBI Oversight Begins
SEBI starts monitoring crypto tokens that resemble securities. A multi-agency regulatory model is proposed, including RBI, SEBI, and the Finance Ministry.
February 13, 2025:VDA Income Tax Amendment Bill Introduced
The bill expands the scope of VIRTUAL Digital Assets (VDAs) to include NFTs and undisclosed income. However, the 30% tax rate remains unchanged.
February 10, 2025: Crypto Exchanges Declared Reporting Entities
Exchanges, wallets, and even mining pools are categorized as “reporting entities.” They must report all transactions to tax authorities under the new AML
Crypto Tax in India – 2025 (Fact-Checked)
As of now, no official reduction has been made to the 30% tax on crypto gains or the 1% TDS, despite industry demands.
1. For Investors and Traders- Flat 30% Tax on gains from crypto sales, swaps, or gifts.
No deductions allowed except for cost of acquisition. - 1% TDS on transfers above ₹10,000 (buyer deducts and remits).
- No loss set-off or carry-forward permitted.
- KYC/AML compliance is mandatory.
- 1% TDS to be collected and remitted on every qualifying user transaction.
- Transaction reporting to tax authorities under PMLA and IT laws.
3. Bybit tax
- All Bybit users must pay 18%Goods and Services Tax (GST)
on all crypto transfers.
- Services like spot and margin trading, derivatives, fiat transactions, and crypto withdrawals are subject to tax.
| Category | Tax Rate | TDS | Example |
| Investors | 30% | 1% if >₹10k | ₹50k profit → ₹15k tax + ₹500 TDS |
| Traders | 30% | 1% if >₹10k | Taxed as business income |
| Companies | NA | 1% collected | ₹10L transaction → ₹10k TDS |
Crypto License in India
Crypto exchanges and service providers must register with the Financial Intelligence Unit (FIU) and comply with anti-money laundering (AML) and know your customer (KYC) policies to be eligible for an official license in India.
What Do Indians Think About Their Crypto Legislation?
- Vote for a better crypto framework: 1 in 93% support crypto regulation. The citizens of India want smart regulations instead of bans. 56% of them support a strong crypto framework, 13% support taxation, and only 24% prefer lighter rules.
- Votes over new authority: The report also shows that 51% of the total crypto users prefer a new authority over RBI (22%) or SEBI (20%).
- Vote against tax regime: When asked about what the biggest discouraging point in crypto in India is, 66% of people voted for 30% on tax gains, while 84% say crypto taxes are unfair vs equities.
- Vote on policy clarity and teaching crypto: 90% would invest more if rules were clearer & taxes fairer. People also showed positive support for crypto education in India, with 76% of votes.
- Vote on Web3: 78% voted that Indians are missing out Web3 trend.
India Leads Overall Institutional Strength in Crypto
According to Chainalysis data, India ranks 1 across the overall index in digital assets. With a thriving fintech ecosystem, widespread use of UPI payments, and innovations such as eRupi, the country is dominating the fintech space. Its crypto space has grown by 99%, as per reports.
| India’s Rank | |
| Overall Index Score | 1 |
| Retail | 1 |
| CeFi | 1 |
| DeFi | 1 |
| Insitutional | 1 |
Crypto Adoption in India (2025 Snapshot)
- Active Users: Over 107.3 million Indians (7.37% of population) hold or trade crypto.
- Revenue Forecast: India’s crypto market is projected to hit $6.4 billion by year-end.
- Exchanges: Platforms like CoinDCX, CoinSwitch, and Mudrex offer access to over 500 tokens.
- Growth Drivers: Rising financial inclusion, smartphone penetration, and blockchain innovation.
- Government Holdings: No official disclosure yet; policies prioritize transparency and user safety.
Conclusion
India’s crypto regulation in 2025 reflects a delicate balance between enabling innovation and enforcing oversight. With strict taxes (30% + 1% TDS) and real-time transaction reporting, the government is creating a compliant ecosystem without enforcing an outright ban. As the FSB review nears, clarity in crypto regulation India could open new doors for mass adoption and position the country at the forefront of the $7 trillion global digital economy.
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FAQs
What is India’s crypto tax in 2025?India imposes a flat 30% tax on crypto gains and a 1% TDS on transfers over ₹10,000, with no loss set-off.
Are cryptocurrencies legal in India?Cryptocurrencies are not legal tender in India but are legal to hold and trade within a regulated tax and compliance framework.
Is there a regulatory body for cryptocurrency in India?India has a multi-agency approach involving RBI, SEBI, and the Ministry of Finance to oversee various aspects of cryptocurrency.
Yes, from April 1, 2025, SEBI began monitoring crypto tokens resembling securities, aligning with a multi-agency regulatory model.
Is India reviewing crypto regulations due to global policy changes?Yes, India is actively reviewing its crypto stance and regulations in 2025 to align with evolving global policies and standards, including the upcoming FSB review.
