Crypto in India: The Ultimate Guide

India is one of the world’s leading cryptocurrency markets with active users expected to soar past 100 million this year.

Here, Ledger Academy explains everything you need to know about cryptocurrency in India, giving you all the necessary tools and knowledge to help you on your journey.

Whether you’re looking to sign up for your first exchange and begin trading, to set up a regular purchase plan, or to learn how to safely store your funds, we’ve got you covered.

How to Buy Cryptocurrency in India

Buy Crypto in India via Centralized Exchange

Step 1: Choose an exchange and create an account

One of the common ways to purchase cryptocurrency is to sign up to a centralized exchange (CEX). There are many choices available including CoinDCX, ZebPay, CoinSwitch or Mudrex. 

You’ll need to submit your personal information to your chosen CEX to create an account. This process will typically ask for your name, date of birth and personal contact details including a valid email and/or mobile phone number.

Step 2: Complete the KYC Process

The CEX will also need your PAN and Aadhaar card numbers as part of their Know Your Customer (KYC) requirements.

You will need to provide information from both these cards to sign up to your chosen exchange. You may also need to submit photographs of both cards, and in some instances include a selfie of yourself holding up your PAN or Aadhaar card.

Step 3: Deposit Funds

Next, deposit some Indian Rupees (INR) onto the exchange with the Deposit INR button. If you don’t immediately see this check under Wallet or Funds, then use a bank transfer or UPI to deposit the money.

Step 4: Choose the Crypto you want to buy

Finally, find and select the cryptocurrency you wish to buy. Depending on the exchange, the buy function may be found under the Trade, Buy/Sell or Exchange button. Click on this, then scroll to the cryptocurrency you wish to purchase, select the amount to buy, and complete your transaction.

Self-custody 

Purchasing cryptocurrency is only the beginning, you also need to store it safely. The best way to do this is by holding the private keys to your cryptocurrencies on a hardware wallet such as the Ledger Flex.

Alternatively, you can choose to directly self-custody your assets purchasing your crypto with Ledger Live, making the transition from buying to storage completely seamless.

Leaving large sums of cryptocurrency on a CEX is inherently risky and never advisable. In crypto history there have been numerous instances of hacks or other failures – Mt.Gox, Quadriga, Bybit – leading to the loss of user funds. Sometimes those funds were recovered and customers reimbursed; at other times, customers weren’t so lucky. 

WazirX hack

In July 2024 WazirX, one of India’s leading and most popular exchanges, fell victim to a hack and lost $230 million – close to 45% of its customer assets. In the aftermath of the hack WazirX announced it would resolve the issue with the “utmost transparency and fairness.”

WazirX decided the fairest way to proceed was by freezing 45% of all user assets on the platform, so customers could no longer withdraw those funds. WazirX continues to explore ways of recovering the lost money, with a number of ideas on the table, but there is no immediate solution in sight.

Today, customers who left their money on WazirX exchange are still without almost half of their crypto. Users who moved their crypto to a hardware wallet such as the Ledger Stax  still have access to all their money.

Buy Crypto in India via a Decentralized Provider

Step 1: Download Ledger Live

A centralized provider is not the only way to buy cryptocurrency in India, you can also purchase your crypto via Ledger’s crypto wallet; Ledger Live. Ledger Live is available for download on a variety of devices including Windows, Mac, Linux, Android and Apple.

Step 2: Choose a Ledger Live Provider and Complete Purchase

Ledger partners with a number of third-party providers for maximum flexibility, ease of use, and coverage. Providers currently on offer include PayPal, MoonPay and Coinify.

Finding the right provider is something that Ledger Live can assist you with. Here are ten easy steps to making your first purchase via Ledger Live.

1. In the Ledger Live app go to the Buy/Sell page. 
2. Click on Find the Right Provider For You.
3. Select the cryptocurrency you wish to purchase.
4. Enter the amount for purchase.
5. Click Confirm Amount.
6. Select your country, which will be India.
7. Select a payment method.
8. Click Find Eligible Providers
9. From the list of eligible providers displayed select the one which you believe offers the best value. You may find different quotes so it pays to shop around.
10. Complete the instructions to complete the purchase.

Is Crypto Legal in India?

Yes, cryptocurrency ownership is legal in India. Users can freely buy, sell, trade and hold cryptocurrencies. 

India has no specific regulatory framework for the industry, and crypto is not recognized as legal tender in the region. So while you can freely own or trade any crypto token you like, crypto lies outside the traditional banking system.

Despite this, Indian traders have plenty of room to interact with the sector, and own other types of crypto assets, including non-fungible tokens (NFTs).

The Reserve Bank of India (RBI) is traditionally skeptical of cryptocurrencies. In April of 2018 the RBI ruled that regulated financial entities in the country could not hold or trade crypto, immediately presenting challenges for exchanges and users alike. 

In March 2020, the Supreme Court overturned the RBI’s decision, judging the restrictions as disproportionate based on the available evidence.

As of today there is no single body that rules over cryptocurrency in India. The RBI, the Digital Currency Board of India (DCBI), the Finance Intelligence Unit (FIU), and the Securities Exchange Board of India (SEBI) are among the players to have some stake or involvement.

Parliament is currently working on a much-needed bill to clarify the matter. If the bill passes in its current form, cryptocurrencies such as Bitcoin, Ethereum, and Solana will be under the primary control and scrutiny of SEBI, while NFTs will remain unregulated.

Crypto Mining in India

Crypto mining is the use of computers to solve complex mathematical problems on blockchain networks. All the machines on the network, which are often specialized for crypto mining, compete to solve the math problem. The winner mines the next block in the chain and receives a reward in the form of cryptocurrency. 

This Proof-of-Work consensus mechanism is used by multiple blockchains, including Bitcoin and Litecoin.

Crypto mining in India is legal, but is not widely practiced, with a 30% tax levied on any income from mining activities. No mining expenses such as electricity can be used to offset the tax burden.

Tax on Crypto in India

Cryptocurrencies in India are classed as Virtual Digital Assets (VDAs) and subject to taxes, with a 30% tax on any profit-taking from crypto transactions, and an additional 4% cess for Health and Education. 

There is also a 1% tax deducted at source (TDS) for any cryptocurrency sale exceeding 50,000 INR, or 10,000 INR in the case of smaller investors. Trading platforms such as CoinDCX charge TDS automatically.

TDS is charged on all crypto purchases and sales. The 30% (+4% cess) rate is only payable on profits made when a cryptocurrency is converted into INR or another cryptocurrency. If you simply hold your cryptocurrency over the tax year you do not need to pay tax.

The filing deadline for your Income Tax Return (ITR) is July 31, with delayed filing possible up until December 31 – although this may incur penalties. Since 2024 the ITR has a dedicated section for VDAs. According to Indian law, it is mandatory for both individuals and exchanges to report all crypto transactions.

It is important to remember that crypto losses cannot be used to offset crypto profits. The easy way to remember this is that 34% of all your profits belong to the government, while 100% of all losses belong solely to you.

Like late filings, incomplete or inaccurate tax filings also incur penalties.

How to Invest in Crypto in India

There are a number of ways to invest in cryptocurrency in India, with direct purchases the most obvious of these.

Another way to acquire crypto is to set up a systematic investment plan (SIP). A SIP is an automated buy plan provided by many exchanges in India. This allows users to gradually accumulate crypto over time according to how much they can afford, their investment strategy, and overall risk appetite. SIP purchases can be set to execute on a weekly, monthly or quarterly schedule, and even on a specific day of the month.

As with any investment it’s important to first study the market and take personal responsibility for your decisions. 

A good plan might be to diversify investments across multiple assets, or to place some of your money into stablecoins during peak market volatility, but you may have other ideas about what strategy is right for you. It’s no one’s decision but yours, which is why crypto investors recommend you Do Your Own Research (DYOR).

Investors should also remember that cryptocurrencies are quite volatile in nature. Never invest more than you can afford to lose.

The Best App to Buy Cryptocurrency in India

Indian customers have a wealth of choices when it comes to cryptocurrency apps, with both global and local players serving the market. For ease of use and INR integration, an app dedicated specifically to the Indian market is probably advisable.

CoinDCX

CoinDCX is the crypto app for those seeking a wider suite of trading tools and more granular controls. Follow top traders for trading signals and alpha, open long and short positions, and trade with leverage. Note: leveraged trading is extremely risky and not recommended for beginners.

• No of currencies: 500+
• KYC required: Yes
• Trading Fees: Variable, from 0.5% to 0.03%. Increased trading means lower fees.
• Deposit Fees: No
• Withdrawal Fees: No
• Pros: Deep liquidity, ease of use
• Cons: Higher trading fees for small traders

ZebPay

ZebPay enables users to trade over 100 cryptocurrencies quickly and securely. 

• No of currencies: 100+
• KYC required: Yes
• Fees: 0.5% on quick trades
• Deposit Fees: No
• Withdrawal Fees: Yes, 100 INR flat fee plus GST of 18%
• Pros: Easy initial set up
• Cons: Strict withdrawal limits, enhanced KYC requirements to unlock higher withdrawals, high withdrawal fees, plus other fees including idle account fees

Coinswitch

With 20 million users, Coinswitch must be doing something right. Coinswitch offers advanced chart features and enables its customers to start trading with as little as 100 INR.

• No of currencies: 200+
• KYC required: Yes
• Fees: From 0.4% to 0.04%
• Deposit Fees: No
• Withdrawal Fees: No
• Pros: User-friendly interface, price comparisons across the industry
• Cons: INR cash withdrawals only, crypto cannot be withdrawn and stored safely on a hardware wallet

Mudrex

Mudrex makes crypto trading easy with 350+ tokens available for trading with 100x leverage and deep liquidity.

• No of currencies: 650+
• KYC required: Yes
• Fees: 0.25%
• Deposit Fees: INR incurs no fees while other currencies are charged at 0.5%
• Withdrawal Fees: Fiat (1% plus 1% TDS fee plus 18% GPS) and Crypto (2%)
• Pros: A large number of coins
• Cons: Complex fee structures and additional fees

Ledger Live

Ledger Live supports thousands of cryptocurrencies and is designed to integrate seamlessly with your Ledger device, empowering you to buy, trade and hold your crypto with complete confidence and peace of mind.

• No of currencies: 15,000+
• KYC required: Ledger Live can be used without KYC, however third party service providers may require KYC information
• Fees: Ledger Live charges no fees, but network fees apply
• Pros: With a huge number of coins to choose from and with seamless hardware wallet integration, Ledger Live is the fastest and safest way to trade and store your cryptocurrency.

Conclusion

Cryptocurrency is increasingly popular among India’s citizens, who are free to enjoy a wide range of opportunities and services in the sector. But recent history such as the WazirX hack also highlights why investors should employ best security practices, transferring their cryptocurrency to self-custody hardware wallets such as the Ledger Stax or Ledger Flex.

Frequently Asked Questions about Crypto in India

Is Bitcoin legal in India?

Bitcoin and other cryptocurrencies are legal in India.

Do you pay tax on crypto in India?

Yes, crypto profits are taxed at 30% plus 4% cess.

Can you mine cryptocurrency in India?

It is perfectly legal to mine cryptocurrency in India, but any profits from doing so are taxable at the same 30% rate.

What is the best cryptocurrency to invest in India?

The best cryptocurrency is subjective and a matter of personal taste, but popular cryptocurrencies include Bitcoin (BTC), Ethereum (ETH), and Solana (SOL).

In our series of Country Guides, Ledger Academy walks you through the steps of how to buy, sell, and hold crypto assets safely and securely in various jurisdictions across the globe. We also take a look at other aspects of crypto like NFTs, the regulatory landscape, the state of Bitcoin mining, and any potential tax implications of owning crypto.

For similar guides covering other regions, check out our comprehensive crypto guides for Germany, Turkey, and Thailand.