Cracking crypto in India: your go-to guide for 2025

28 August, 2025

~ 3 min

India is rapidly emerging as a global crypto powerhouse, with a user base projected to surge past 100 million this year. If you’re looking to dive into the world of cryptocurrency in India, you’ve come to the right place. This guide breaks down everything you need to know, from buying your first crypto to securing your digital assets.

Getting started: buying crypto in India

So, you want to buy some crypto? Here’s how to do it:

Choose a Centralized Exchange (CEX): Popular options include CoinDCX, ZebPay, CoinSwitch, and Mudrex. Think of these as online crypto marketplaces.
Create an account: You’ll need to provide personal information like your name, date of birth, email, and phone number.
KYC verification: Get ready to submit your PAN and Aadhaar card details. You might also need to upload photos of these documents and even a selfie holding one of them. This is a standard “Know Your Customer” procedure to ensure security and compliance.
Deposit funds: Transfer Indian Rupees (INR) to your exchange account. Look for a “Deposit INR” button or use a bank transfer or UPI.
Buy crypto: Find the cryptocurrency you want to buy, select the amount, and complete the transaction. Look for options like “Trade,” “Buy/Sell,” or “Exchange.”

Important: secure your crypto!

Buying crypto is just the first step. Storing it safely is crucial. The best way to protect your investment is by using a hardware wallet like Ledger. This gives you complete control over your private keys, keeping your crypto safe from online threats. Some wallets like IronWallet even allow you to purchase crypto directly into self-custody.

The WazirX hack: a cautionary tale

In July 2024, a major Indian exchange, WazirX, suffered a massive hack, losing $230 million (nearly half of its customer assets!). As a result, WazirX froze 45% of user assets. While the exchange is working to recover the funds, many users are still locked out of a significant portion of their crypto.

This highlights the importance of self-custody. Users who moved their crypto to a hardware wallet retained full access to their funds, while those who left their crypto on the exchange are still facing uncertainty.

Is crypto legal in India?

Yes! Owning and trading cryptocurrency is legal in India. You can freely buy, sell, and hold crypto assets.

However, crypto isn’t recognized as legal tender and operates outside the traditional banking system. There’s also no single regulatory body governing the industry. The RBI, DCBI, FIU, and SEBI all have some level of involvement.

Parliament is currently working on a bill to clarify the regulatory landscape. If passed, SEBI would primarily oversee cryptocurrencies like Bitcoin and Ethereum, while NFTs would remain largely unregulated.

Crypto mining in India

Crypto mining, the process of verifying blockchain transactions, is legal in India but not very common due to a high 30% tax on mining income, with no deductions for expenses like electricity.

Crypto taxes in India

In India, cryptocurrencies are classified as Virtual Digital Assets (VDAs) and are subject to taxation:

30% Tax: On profits from crypto transactions.
4% Cess: For Health and Education.
1% TDS: Tax Deducted at Source for any crypto sale exceeding 50,000 INR (or 10,000 INR for smaller investors).

TDS is automatically charged by trading platforms like CoinDCX.

Remember: Crypto losses cannot be used to offset crypto profits. The government gets 34% of your profits, but you bear 100% of your losses. The filing deadline for your Income Tax Return (ITR) is July 31st, with late filing possible until December 31st (with potential penalties). Since 2024, the ITR has a dedicated section for VDAs.

How to invest wisely in crypto in India

Direct purchases: The most straightforward way to invest.
Systematic investment plan (SIP): Automate your crypto purchases over time. Many exchanges offer SIPs, allowing you to invest a fixed amount weekly, monthly, or quarterly.

As with any investment, do your research (DYOR) and take personal responsibility for your decisions. Consider diversifying your investments or using stablecoins to mitigate volatility. And never invest more than you can afford to lose!

Conclusion

India offers a vibrant crypto ecosystem, but it’s crucial to prioritize security. Transfer your cryptocurrency to a self-custody hardware wallet like IronWallet to protect your assets.

Frequently asked questions about crypto in India

Is Bitcoin legal in India? Yes.
Do you pay tax on crypto in India? Yes, profits are taxed at 30% plus 4% cess.
Can you mine cryptocurrency in India? Yes, but profits are taxed at 30%.
What is the best cryptocurrency to invest in India? That depends on your personal preferences and risk tolerance. Popular options include Bitcoin (BTC), Ethereum (ETH), and Solana (SOL).