Cryptocurrency in India is legal to buy, sell, and hold, but it is not classified as legal tender. The government treats cryptocurrencies as "Virtual Digital Assets" (VDAs) that are subject to strict taxation and anti-money laundering (AML) compliance rules.Key Tax RulesFlat 30% Tax: All profits made from transferring or trading VDAs are taxed at a flat 30% (plus applicable surcharges and cess).No Loss Offsetting: Losses incurred from trading one cryptocurrency cannot be offset against profits from another.1% TDS: A 1% Tax Deducted at Source (TDS) is levied on all crypto transactions.Legal & Regulatory StatusNot Legal Tender: You cannot use cryptocurrency to pay for goods or services as official money.VDA Regulations: Exchanges operating in India must register with the Financial Intelligence Unit - India (FIU-IND) and strictly enforce Know Your Customer (KYC) and AML protocols.Official Digital Rupee: The Reserve Bank of India (RBI) has introduced its own official Central Bank Digital Currency (CBDC), the Digital Rupee, which is legal tender.