Is crypto taxed in India? A regulatory overview

Since 2022, India has seen evolving regulations as it navigates the global digital finance landscape. Initially, the Indian government approached crypto with caution. Over the years, as crypto trading grew more popular, regulatory frameworks began taking shape to protect investors and establish a more straightforward tax environment.

In 2022’s financial budget, the Indian government included a bill introducing crypto taxation. Section 115BBH of the 2022 Budget levied a 30% tax on the profits of trading cryptocurrencies or other virtual digital assets (VDAs) from April 1, 2022.

This created a buzz on X, with a meme fest breaking out and many questioning whether crypto was now legal in India since it was taxable.

India’s Finance Minister Nirmala Sitaraman clarified and was quoted at a high-level panel discussion organized by the International Monetary Fund:

“We haven’t said that this is currency. We haven’t said that this has intrinsic value, but certain operations are taxable for the sovereign, and that is why we have taxed”.

She added, “We did announce that the income generated out of the transactions of these crypto assets will be taxed at 30 percent, and over and above that, there is a 1 percent tax deduction at source, which is also imposed on every transaction. So, through that, we will be able to know who’s buying and who’s selling it.”