India’s crypto market has seen significant growth, fueled by rising retail and institutional interest. Despite the enthusiasm, the regulatory environment remains uncertain, as the government and the Reserve Bank of India (RBI) continue to deliberate on a formal licensing framework. While there is currently no dedicated crypto license, crypto businesses must comply with taxation rules and general laws.

Key Requirements:

1. Company Registration & Corporate Compliance

   • Incorporate as an Indian legal entity under the Companies Act (or Limited Liability Partnership).
   • Adhere to standard corporate governance, auditing, and reporting requirements.

2. Taxation on Crypto Transactions

   • 30% flat tax on crypto profits (no deductions allowed beyond acquisition cost).
   • 1% TDS (Tax Deducted at Source) on transactions above specified thresholds.
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3. AML/CFT Measures 

   • Although not formally mandated under a dedicated crypto law, best practice involves implementing AML/CFT controls such as robust KYC processes.
   • Potential alignment with RBI guidelines for payment and financial service providers.

4. Consumer Protection & Awareness

   • Certain aspects of consumer protection come under existing financial legislation.
   • Crypto platforms often maintain secure IT infrastructure, transparent fee structures, and clear user agreements to build trust.

Fees & Associated Costs:

• Regulatory & Incorporation Costs:
  • Standard company formation fees, government charges, and professional services vary by state and entity type.
• Tax Liabilities:
  • Crypto profits taxed at 30%, plus applicable surcharges and cess.
  • 1% TDS obligations can affect liquidity and operational costs.

While India’s crypto regulations remain fluid, businesses can thrive by adopting robust compliance strategies, transparent operations, and ongoing engagement with policymakers. India’s vast consumer base and burgeoning tech talent pool present massive opportunities, making proactive compliance a strategic move for any crypto enterprise eyeing long-term growth.