How do cryptocurrency transactions work in India?

Cryptocurrency transactions in India work through crypto exchanges that allow users to buy, sell, and transfer digital assets like Bitcoin or Ethereum. Users must complete KYC (Know Your Customer) verification, link their bank accounts, and use INR (Indian Rupee) to trade. All transactions are recorded on a blockchain, and profits may be taxed as per the latest government regulations.

What Is a Cryptocurrency Transaction?

A cryptocurrency transaction refers to transferring digital currency from one person’s wallet to another through blockchain technology. In India, this is done using exchanges that comply with Indian laws and offer wallets for holding crypto securely.

Each transaction is verified and recorded on a public ledger called the blockchain, making it transparent and irreversible.

Steps to Make a Crypto Transaction in India

Here’s how most cryptocurrency transactions happen in India:

• 1. Create an Account: Register with a SEBI-registered crypto exchange platform like CoinDCX, WazirX, or CoinSwitch.
• 2. Complete KYC: Upload PAN, Aadhaar, and bank details for verification as per Indian regulations.
• 3. Fund Your Wallet: Add INR funds to your exchange wallet using UPI, net banking, or IMPS.
• 4. Buy Cryptocurrency: Use your INR balance to buy cryptocurrencies like Bitcoin, Ethereum, etc.
• 5. Make Transactions: Send, receive, or trade crypto through your wallet or exchange.

Is Crypto Legal in India?

Cryptocurrencies are not illegal in India, but they are not yet regulated under a specific law. The government allows trading through exchanges, and income from crypto is taxed.

From April 2022, the Indian government has imposed a 30% tax on crypto profits and a 1% TDS on each transaction, making transparency a priority.

Safety Measures in Crypto Transactions

To stay safe while transacting in crypto, follow these key tips:

• Use only reputed, registered exchanges.
• Enable 2FA (Two-Factor Authentication) on your wallet.
• Never share your private keys.
• Track all transactions and store records for tax filing.
• Avoid unknown or unverified links and platforms.

Cryptocurrency transactions in India have become more accessible and transparent with growing exchange platforms and government clarity. While the future of crypto regulation is still evolving, Indian investors can legally buy, sell, and hold cryptocurrencies while adhering to KYC and tax rules. For beginners, it’s important to stay updated with legal changes and use only verified platforms for crypto dealings.