Bharat Sarkar’s Latest Moves on Crypto Promotion & Regulation (2025 Update)
The Indian government’s stance on cryptocurrency continues to evolve in 2025, balancing growth and innovation with regulation and tax compliance. While India hasn’t outright banned cryptocurrencies, the authorities are actively shaping a framework that addresses both the risks and opportunities of digital assets.
Policy Review & Regulatory Reassessment
In early 2025, senior government officials confirmed that India is reviewing its position on cryptocurrency regulation, influenced by global developments and shifting international attitudes toward digital assets. This review reflects the government’s recognition that a unilateral, overly restrictive approach may not be effective in a borderless digital financial ecosystem. The economic affairs secretary indicated the need to revisit an earlier discussion paper and possibly recalibrate India’s regulatory framework based on global trends.
Crypto Taxation Framework
Tax policy has been one of the most significant aspects of the government’s approach. Under the existing regime, gains from crypto trading are taxed at 30%, with an additional 1% TDS (tax deducted at source) on transactions above a threshold. This strict taxation model—first introduced in previous budgets—remains in place in 2025 and continues to be a major feature of India’s crypto policy environment.
The government has also taken steps to deter undeclared crypto income. Authorities can now impose penalties of up to 70% on undisclosed crypto gains, alongside retrospective tax implications—a move aimed at enhancing compliance.
Legal Recognition & Judicial Developments
A notable legal development in late 2025 was a Madras High Court judgment declaring cryptocurrency as “property” under Indian law. This ruling has significant implications: it recognizes crypto assets as legally protected assets capable of being owned, transferred, and inherited. For investors, this judicial backing offers greater clarity and protection against disputes—such as in cases of exchange hacks or asset freezing.
Enhanced Reporting & Compliance
Beyond taxation, India is planning enhanced regulatory reporting standards. Preparations are underway to implement a cryptocurrency reporting system by April 2027, aligning with international frameworks like the OECD’s Crypto-Asset Reporting Framework (CARF). This shift aims to boost transparency, facilitate compliance, and support cross-border data sharing on crypto transactions.
Government Position on Regulation vs. Promotion
Despite being cautious, the government has reiterated that cryptocurrencies are allowed as Virtual Digital Assets (VDAs)—meaning individuals can buy, hold, and sell crypto within defined limits—though they are not legal tender. The finance minister also highlighted that India is not currently collecting comprehensive crypto data or regulating the industry through a standalone crypto law, emphasizing the need for international cooperation to make any regulatory framework effective.
This nuanced approach signals that the government does not seek to stifle digital asset usage entirely but intends to regulate it carefully while protecting financial integrity and investor interests.
Investor Impact & Market Sentiment
The combined effect of high taxes and stricter compliance has influenced investor behavior. Many international exchanges, such as Bybit, have introduced 18% GST on Indian user transactions to align with Indian tax policies, raising concerns among local crypto users about increased financial burdens.
Conclusion
In 2025, the Bharat Sarkar’s strategy on cryptocurrency is one of cautious engagement: India is promoting digital innovation through legal recognition and future reporting frameworks, even as it tightens tax and compliance rules to mitigate risks. This approach reflects a desire to embrace the potential of crypto while ensuring that the financial system remains secure, transparent, and fair for all stakeholders.
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