How to Buy Cryptocurrency in India Legally: A Simple Guide for 2025

Learn how to buy cryptocurrency legally in India in 2025 with this simple beginner’s guide. Covers trusted exchanges, tax rules, payment methods, and safe storage.

Introduction

Buying cryptocurrency in India is legal and easier than ever in 2025, thanks to clear rules and user-friendly platforms. While crypto isn’t accepted as regular money, you can buy, sell, and hold it as a digital asset. This guide walks you through the steps to buy crypto safely, covering exchanges, taxes, and storage, all in simple terms for beginners.

Is Buying Crypto Legal in India?

Yes, buying cryptocurrency is legal in India as of 2025. The Supreme Court lifted a banking ban on crypto in 2020, allowing people to trade and hold digital assets like Bitcoin and Ethereum. However, crypto is not legal tender, meaning you can’t use it to buy everyday items like groceries. The government treats crypto as a virtual digital asset (VDA), with a 30% tax on gains and a 1% tax deducted at source (TDS) on transactions over ₹10,000.

Step-by-Step Guide to Buying Crypto

Follow these steps to buy crypto legally and safely in India:

1. Choose a Trusted Crypto Exchange

Pick a reputable exchange that follows India’s rules, like Know Your Customer (KYC) and Anti-Money Laundering (AML) guidelines. Popular exchanges in 2025 include:

• Mudrex: Easy to use, supports UPI payments, and offers over 350 cryptocurrencies. You can start with as little as ₹100.
• CoinDCX: Secure, with a wide range of coins and strong customer support.
• Binance: A global exchange that’s legal in India but operates in a regulatory gray area. It requires KYC and may share data with authorities.
• ZebPay: User-friendly, with over 3 million users and zero deposit fees.

Research fees, security, and coin options before choosing. For example, Mudrex supports UPI apps like Paytm, making deposits simple.

2. Register and Complete KYC

To buy crypto, you need an account on your chosen exchange:

• Sign Up: Create an account with your email and phone number.
• Verify Identity: Submit documents like your Aadhaar card, PAN card, and bank details. The PAN card must be linked to the bank account you’ll use. This KYC process is required by law to prevent fraud.
• Set Up Security: Add two-factor authentication (like a phone code) to keep your account safe.

KYC usually takes a few hours to a day. Some exchanges, like Binance, may let you trade small amounts before full verification, but completing KYC is mandatory for larger transactions.

3. Deposit Money

Add Indian Rupees (INR) to your exchange wallet using:

• UPI: Fast and easy, supported by apps like Google Pay or PhonePe.
• Bank Transfers: Use NEFT, IMPS, or net banking for larger amounts.
• Debit/Credit Cards: Some exchanges allow card payments, but fees may be higher.

There’s no minimum amount to buy crypto—you can start with as little as ₹100 on platforms like Mudrex or CoinDCX. Deposits are usually instant with UPI or take 1–2 hours with bank transfers.

4. Buy Your Cryptocurrency

Once your wallet has INR, you’re ready to buy:

• Pick a Crypto: Choose from Bitcoin (BTC), Ethereum (ETH), stablecoins like USDT, or meme coins like Dogecoin. You can buy fractions of a coin (e.g., 0.001 BTC).
• Place an Order: Use the exchange’s “Buy” option. You can buy at the current price (market order) or set a price you want (limit order).
• Pay: Use the INR in your wallet to complete the purchase. For example, on Mudrex, go to the coin’s page, click “Buy,” and pay with USDT or INR.

In 2025, 1 Bitcoin costs around ₹93,27,074.43, but you can buy small amounts to fit your budget.

5. Store Your Crypto Safely

After buying, decide where to store your crypto:

• Exchange Wallet: Most exchanges, like WazirX, provide a built-in wallet. It’s convenient but less secure due to risks like hacks (e.g., the WazirX hack in 2024).
• Cold Wallet: A hardware device like Ledger keeps your crypto offline, making it safer. You can buy a Ledger device and use Ledger Live to manage your coins.
• Hot Wallet: A mobile or desktop app, like MetaMask, for easy access. Always use a VPN for extra security when using hot wallets.

For safety, move your crypto to a cold wallet if you’re holding it long-term. Never share your private keys.

Taxes on Crypto in India

Crypto profits are taxed in India:

• 30% Capital Gains Tax: Applies to any profit from selling crypto, no matter your income level. For example, if you buy Bitcoin for ₹1,000 and sell for ₹1,500, you pay 30% on the ₹500 profit.
• 1% TDS: Deducted on transactions over ₹10,000 (or ₹50,000 for larger investors). Indian exchanges like CoinDCX collect TDS automatically, but you may need to report it manually on international platforms like Binance.
• Record Keeping: Track all transactions for tax filing. Platforms like Mudrex provide tax reports to make this easier.

Consult a tax expert to ensure you file correctly, as penalties for missing TDS are high.

Tips for Safe Crypto Buying

• Start Small: Crypto prices can swing wildly (e.g., Bitcoin dropped 20% in early 2025). Invest only what you can afford to lose.
• Check Regulations: The government is working on a crypto bill that may add new rules in 2025. Stay updated via news or exchange blogs.
• Avoid Scams: Use regulated exchanges and beware of fake apps or P2P traders promising quick profits.
• Research Coins: Learn about the crypto you’re buying. Bitcoin is seen as a store of value, while Ethereum powers apps. Meme coins like Dogecoin are riskier due to hype-driven prices.
• Secure Your Account: Use strong passwords, two-factor authentication, and a VPN for online transactions.

Why Buy Crypto in India?

• High Returns: Bitcoin grew from $800 in 2015 to over $90,000 in 2025, offering big potential (but also big risks).
• Easy Access: Over 20 million Indians own crypto, and exchanges make it simple to start.
• Innovation: India’s support for blockchain, like the Telangana Web3 Sandbox, shows a bright future for crypto tech.
• Diversification: Adding crypto to your portfolio can balance risks, but experts suggest limiting it to 5–10% of your investments.

Challenges to Watch Out For

• Volatility: Prices can crash quickly, so only invest what you’re okay losing.
• Regulatory Uncertainty: A new crypto bill may change rules, so keep an eye on updates.
• Security Risks: Hacks like WazirX’s in 2024 show the importance of cold storage.
• Tax Complexity: The 30% tax and 1% TDS can reduce profits, and tracking transactions is key.

The Future of Crypto in India

In 2025, India’s crypto market is booming, with a projected market size of $2.2 billion by 2026. The government is moving toward clearer rules, balancing innovation with safety. More Indians are joining the crypto wave, using platforms like Mudrex and CoinDCX for easy trading. With global trends like Bitcoin ETFs in the US, India may see more crypto-friendly policies soon.

Conclusion

Buying cryptocurrency in India in 2025 is legal and straightforward if you use a trusted exchange, complete KYC, and follow tax rules. Start with platforms like Mudrex, coinDCX deposit INR via UPI, and buy small amounts to test the waters. Store your crypto securely in a cold wallet and track transactions for taxes. While crypto offers exciting opportunities, its volatility and regulatory changes mean you should research carefully and invest wisely.