Crypto mining in India is not illegal, but a 30% tax, no deductions, and strict monitoring make it nearly impossible to profit. Learn the 2025 rules, penalties, and why miners are leaving.
VDA Regulations India: What You Need to Know About Crypto Compliance
When you trade or hold crypto in India, you’re dealing with Virtual Digital Assets (VDA), a legal classification for cryptocurrencies and NFTs under Indian tax law. Also known as digital assets, VDAs are treated as property, not currency, which means every trade, swap, or sale triggers a taxable event. This isn’t just a suggestion—it’s enforced by the Income Tax Department, and failing to report can lead to penalties or audits.
India’s VDA rules, introduced in 2022 and updated through 2024, require you to pay 30% tax on profits from crypto sales, with no deductions for losses. Plus, there’s a 1% TDS on every transaction over ₹10,000, whether you’re buying or selling. These rules hit hard because they don’t care if you broke even or lost money—you still pay tax on gains, and the exchange reports your activity directly to the government. The system relies on KYC data from exchanges like Coincall and Bitpin, so if you’ve done any trading on a regulated platform, your history is already flagged. And if you’re using DeFi protocols or peer-to-peer trades? You’re still responsible for tracking and reporting those yourself.
What’s missing from most people’s understanding is how VDA rules connect to real-world tools and risks. For example, if you claim a token like FLUX or 3ULL from an airdrop, that’s a taxable receipt. If you hold BOMB or UCO and later sell, you owe tax on the difference between what you got it for and what you sold it for. Even if you just bought USDT with INR and never touched another coin, the 1% TDS still applies. The government isn’t just watching big exchanges—they’re tracking wallet activity through data-sharing agreements under CARF and DAC8, which means your crypto moves could soon be shared with tax agencies in 67 other countries. This isn’t about targeting traders—it’s about closing loopholes that let people avoid reporting income.
There’s no gray area here. You can’t ignore VDA regulations and hope they go away. The posts below show what happens when people don’t comply—like fake airdrops pretending to be government-backed, or exchanges like Coinrate and 3xcalibur that vanish overnight, leaving users with no records to file taxes with. Others, like the GEMS NFT airdrop or Flux Protocol’s giveaway, are real but still taxable. Whether you’re holding a meme coin with zero volume or staking RDNT for rewards, the rules apply. What you’ll find here are clear breakdowns of how crypto events in India tie into VDA compliance, what you must document, and how to avoid getting caught in scams that prey on confusion around the law. This isn’t theory—it’s what you need to know to stay safe and legal in India’s crypto space.