Is Crypto Legal in India in 2026? Rules, Tax and FIU-Registered Exchanges
Yes, owning and trading crypto is legal in India, but it isn’t legal tender, it’s heavily taxed, and exchanges must register with the Financial Intelligence Unit. There’s no law banning individuals from buying USDT. Instead, India regulates crypto through tax, anti-money-laundering rules and pressure on unregistered platforms. Here’s how the rules developed and what they mean for you.
Looking for the price instead? See the live USDT to INR rate.
Key milestones
| When | What happened |
|---|---|
| April 2018 | The RBI told banks not to deal with crypto businesses. |
| March 2020 | The Supreme Court struck down the RBI’s restriction (Internet and Mobile Association of India v. RBI), reopening banking access. |
| April 2022 | 30% tax on crypto gains took effect. |
| July 2022 | 1% TDS on crypto transfers took effect. |
| March 2023 | Crypto businesses were brought under the anti-money-laundering law (PMLA) and must register with FIU-IND. |
| Late 2023 – 2024 | Offshore exchanges that hadn’t registered faced notices and blocking; several then registered. |
| March–April 2024 | OKX stopped serving Indian users, citing local rules. |
| Early 2025 | Bybit, briefly blocked, registered with FIU-IND (after a penalty) and restored services. |
| February 2026 | Union Budget 2026 kept the 30% tax and 1% TDS unchanged. |
| April 2026 | The Income-tax Act, 2025 replaced the 1961 Act; the crypto TDS rule moved from Section 194S to Section 393. |
Exchange status for Indian users (October 2026)
| Exchange | Status |
|---|---|
| Binance | Registered with FIU-IND (2024, after a penalty) |
| Bybit | Registered with FIU-IND (early 2025, after a penalty and a brief block) |
| OKX | Stopped serving Indian users in 2024 |
coinglee covers Binance and Bybit for India for this reason. Before using any platform, check FIU-IND’s list of registered reporting entities.
What FIU registration means
Registered exchanges are “reporting entities” under PMLA. They must:
- verify customers’ identity (KYC), which is why they ask for Aadhaar, PAN and a face scan;
- keep records and report suspicious transactions to FIU-IND;
- follow anti-money-laundering rules like other financial businesses.
For you, this means your trades on these platforms are traceable, which matters for tax and for any bank investigation.
What’s legal and what isn’t
| Status | |
|---|---|
| Buying, holding and selling crypto, including USDT, on registered platforms | Legal |
| Using crypto to pay for goods and services | Not legal tender; nobody has to accept it |
| Using unregistered offshore platforms | Risky: may be blocked, less protection |
| Not reporting gains or ignoring TDS | Illegal under tax law |
Your obligations: 30% tax on gains, accounting for TDS, and reporting in Schedule VDA. See 1% TDS and 30% tax on crypto.
P2P trading: legal, but watch the risks
Buying USDT from another user through an exchange’s P2P market is legal. The real-world risks are:
- Bank account freezes after cyber-crime complaints, if the money you receive turns out to come from fraud. This is by far the most common problem. See P2P safety in India and triangle scams and fake UPI screenshots.
- Unregistered platforms, which may be blocked and offer less protection.
- Off-platform deals on WhatsApp or Telegram, which have no escrow and can expose you to money-laundering investigations.
Could the rules change?
Yes. India has discussed a comprehensive crypto law and a discussion paper on crypto policy for years, and tax rules can change in any Union Budget. The RBI has repeatedly expressed concern about private cryptocurrencies, while the government has continued to tax and regulate rather than ban. Follow official announcements before making large trades.
Common questions
Can my bank refuse transfers to crypto exchanges? Banks can apply their own risk checks, but the RBI’s 2018 blanket restriction was struck down. Problems usually come from fraud complaints, not from crypto itself.
Is the Digital Rupee (e₹) the same as crypto? No. The e₹ is the RBI’s central bank digital currency, legal tender issued by the RBI. Some P2P sellers accept e₹ as a payment method.
Do I need to report USDT I hold but haven’t sold? Holdings aren’t taxed until transferred, but keep records of what you bought and when. High-income filers may need to disclose assets in their return.
This is general information as of October 2026, not legal advice.
Registration does not answer every consumer question
Check the platform’s legal entity and the services available to your account, not only its brand name. AML registration, the ability to deposit rupees, permission to withdraw a particular token and protection against investment losses are different questions. One does not establish all the others.
Before relying on a service, read its current deposit, withdrawal and dispute terms and retain a copy relevant to your transaction date. A foreign licence does not automatically describe its Indian status. If a bank payment or asset is restricted, ask the institution for the specific reason rather than assuming all restrictions are caused by the same crypto rule.