The Indian government has maintained its firm stance on digital assets in its latest legislative updates, opting for strict oversight and taxation rather than a full regulatory framework or an outright ban
- Legislative Status and Policy
- There is no dedicated cryptocurrency bill passed as of early 2026.
- The government is leaning away from creating a comprehensive law to regulate crypto, fearing that full integration into the mainstream financial system could create systemic risks.
- Partial oversight remains the strategy, with a focus on monitoring transactions rather than granting full legitimacy.
- Taxation Framework for 2025-2026
- The flat 30% tax on all gains from Virtual Digital Assets (VDAs) remains in effect.
- A 1% Tax Deducted at Source (TDS) continues to apply to every transaction exceeding specific thresholds.
- Losses from one crypto asset cannot be used to offset gains from another.
- For the 2026-2027 fiscal cycle, the government has confirmed it will maintain this existing tax structure, rejecting industry calls for relief.
- New Compliance and Reporting Measures
- Finance Bill 2025 introduced an amendment requiring designated reporting entities to disclose all transaction details related to VDAs.
- Unreported crypto holdings are now classified as undisclosed income, which can attract a 60% tax rate plus surcharges if identified by authorities.
- The Financial Intelligence Unit (FIU) has mandated registrations for both domestic and offshore exchanges to ensure compliance with Anti-Money Laundering (AML) rules.
- Legal Classification
- Cryptocurrencies are legal to buy, hold, and trade on registered platforms but are not recognized as legal tender.
- They are officially categorized as Virtual Digital Assets under the Income Tax Act.
- Some judicial interpretations, such as from the Madras High Court in 2025, have recognized crypto as property.
