Crypto Exchange Restrictions in India: What You Can and Can't Do

When it comes to crypto exchange restrictions in India, rules that limit how users can buy, sell, or hold digital assets through local platforms. Also known as Indian crypto trading limits, these restrictions aren’t a full ban—but they’re tight enough to make daily trading feel like walking through a minefield. The Reserve Bank of India never outlawed crypto, but banks were told to avoid serving crypto businesses. That created chaos. Exchanges like WazirX and CoinDCX had to scramble, switch banking partners, or move operations offshore. Now, most platforms require full KYC, identity verification required by law to prevent money laundering and fraud. Also known as customer due diligence, it’s the price of entry for any Indian user. Without verified ID, you can’t even deposit rupees. And even then, withdrawals can be slow or blocked if the system flags unusual activity.

Then there’s the taxation, a 30% flat tax on crypto gains plus 1% TDS on every trade, making India one of the toughest places to trade crypto. Also known as crypto tax rules India, this system doesn’t just collect revenue—it discourages frequent trading. You can’t offset losses against profits. Every sale, even if you broke even, triggers a tax event. And if you use a foreign exchange like Binance? You’re still on the hook. The Income Tax Department tracks on-chain activity, and they’ve started matching wallet addresses with PAN cards. This isn’t about stopping crypto—it’s about controlling it. The government wants visibility, not prohibition. That’s why exchanges now report user data to authorities. It’s not a secret. It’s compliance.

What’s missing? Peer-to-peer trading is still alive, but it’s risky. Platforms like LocalBitcoins or Paxful work, but you’re on your own if someone scams you. No chargebacks. No recourse. And if you’re using DeFi apps like Uniswap through a VPN? You’re technically violating India’s foreign exchange laws. The law doesn’t say "don’t use DeFi," but it does say "don’t move money out of India without approval." That’s the gray zone millions are stepping into every day.

What you’ll find below are real reviews and breakdowns of how these rules play out in practice. Some posts cover how Indian traders bypass restrictions safely. Others expose exchanges that claim to be "India-friendly" but still lock withdrawals. There’s a deep dive into how tax reporting works on the ground, and what happens when your bank freezes your account because you bought Bitcoin. You’ll see what’s changed since 2023, what’s still the same, and who’s actually winning under these rules—not the regulators, but the ones who learned how to play the game without getting caught.