How to Buy Bitcoin (BTC) in India: A Complete Guide
Bitcoin, the world’s first and most well-known cryptocurrency, is gaining popularity in India just like it has around the globe. What once seemed like a risky or unfamiliar digital asset is now becoming part of regular investment plans — especially for people who want to invest beyond traditional options like shares, mutual funds, or fixed deposits. As more people learn about it, and with better apps and clearer rules from the government, buying Bitcoin in India has become much more convenient and secure.
Still, it’s important to understand that cryptocurrency is not like regular investments. The market can be highly unpredictable, and there are specific tax rules and safety steps you need to follow. This guide will help you understand everything you need before buying your first Bitcoin — including whether it’s legal, how it’s taxed, where you can buy it, and how to store it safely.
What is Bitcoin?
Bitcoin is a decentralized digital currency that enables peer-to-peer transactions without the involvement of any central authority, such as a bank or government. Bitcoin transactions are verified by network participants through cryptographic methods and recorded on a public ledger called the blockchain.
Unlike traditional fiat currencies like the Indian Rupee, Bitcoin is not issued or controlled by any central entity. It has a fixed supply of 21 million coins, making it inherently resistant to inflation. This limited supply, combined with its global accessibility, has positioned Bitcoin as both a digital asset and a potential store of value for long-term investors.
Is It Legal to Buy Bitcoin in India?
Yes, buying and owning Bitcoin is legal in India. The Indian government has not imposed any ban on cryptocurrencies, although they are not considered legal tender. This means that while you can legally invest in Bitcoin, you cannot use it to make everyday purchases like you do with the Indian Rupee.
The government has introduced taxation laws around virtual digital assets (VDAs), which include Bitcoin and other cryptocurrencies. In the Union Budget of 2022, a specific framework for taxing crypto assets was introduced, and that policy continues to be in effect in 2025. It’s important to understand the tax implications before you buy Bitcoin to ensure you remain fully compliant.
Understanding Crypto Taxation in India
If you make a profit from selling Bitcoin, that income is taxed at a flat rate of 30%, irrespective of your tax slab. Additionally, a 1% tax deducted at source (TDS) is applied on transactions above ₹10,000 per year. These rules fall under Section 115BBH and Section 194S of the Income Tax Act.
Unlike stocks or mutual funds, crypto gains cannot be offset against losses from other investments, and you are not allowed to claim any deductions except for the cost of acquisition.
You must also report your crypto income during ITR filing. Many exchanges provide detailed transaction histories, which you can use to calculate gains or losses. Failing to disclose crypto holdings can result in penalties, so transparency is key.
How to Buy Bitcoin in India: Step-by-Step Process
Follow These Simple Steps to Purchase Bitcoin Securely
1. Choose a Crypto Exchange
Getting started with Bitcoin is not as complicated as it may seem. The first step is to select a reliable cryptocurrency exchange that operates in India. Some of the most popular platforms include: WazirX, CoinDCX, ZebPay, CoinSwitch, Binance (global platform, accessible in India)
These exchanges support INR transactions and follow KYC regulations to ensure compliance with Indian laws.
2. Complete KYC Verification
Once you’ve chosen your exchange, register and complete the KYC (Know Your Customer) process. This typically involves uploading your:
PAN card
Aadhaar card or passport
A selfie for facial verification
KYC approval usually takes between a few minutes to 24 hours.
3. Deposit INR Funds
Once verified, deposit Indian Rupees (INR) using:
UPI
Bank Transfer (IMPS/NEFT)
Wallets (varies by platform)
Ensure the bank account you use matches the name on your exchange profile to avoid issues.
4. Buy Bitcoin (BTC)
With funds in your wallet, you can now search for Bitcoin (BTC) and place a buy order. You don’t have to buy a whole Bitcoin — even ₹100 can get you started. Once your order is processed, the Bitcoin will reflect instantly in your exchange wallet.
5. Store Your Bitcoin Safely
While exchanges offer storage, long-term investors should consider transferring their BTC to a private wallet for added security.
Types of wallets:
Hardware wallets: Offline, ultra-secure (e.g., Ledger, Trezor)
Software wallets: Apps like Trust Wallet, Exodus
Paper wallets: Physical copies of your private keys
If you plan to hold Bitcoin long-term, a hardware or cold wallet is the safest option.
What to Consider Before Investing
Before diving into the world of Bitcoin, assess your risk tolerance. Cryptocurrency markets are volatile, and prices can swing significantly in short periods. Always start with small amounts and never invest money you can't afford to lose.
Enable two-factor authentication (2FA), use secure passwords, and be cautious of phishing attempts or fake apps. Your wallet’s private keys should always be kept offline and never shared with anyone.
Keep an eye on government regulations, as crypto policies in India may evolve. Stay informed to avoid compliance issues and make educated investment decisions.
Do You Need to Pay Tax on Bitcoin in India?
Yes. Any profit earned from selling Bitcoin is subject to a flat 30% tax, plus 1% TDS on transactions exceeding ₹10,000 annually. These taxes apply regardless of whether you hold Bitcoin for the short or long term.
Always keep a detailed record of your transactions, including buy and sell dates, amounts, and gains. Many exchanges now offer downloadable tax reports to simplify the filing process.
For proper reporting, Bitcoin income should be declared under the ‘Capital Gains’ or ‘Income from Other Sources’ section in your ITR, based on your usage pattern. If in doubt, consult a tax professional.
1. Is it legal to buy Bitcoin in India?
Yes, buying and holding Bitcoin is completely legal in India. However, it is not considered legal tender, which means you can invest in it but cannot use it for regular purchases. Also, gains from crypto are taxable under current laws.
2. How much money do I need to start investing in Bitcoin?
You can start investing in Bitcoin with as little as ₹100. Most exchanges allow fractional purchases, so you don’t need to buy a full Bitcoin.
3. Which is the safest app or exchange to buy Bitcoin in India?
Trusted Indian platforms like WazirX, CoinDCX, and ZebPay offer secure options with KYC verification. For extra safety, use two-factor authentication and store large amounts in a private wallet.
4. Do I have to pay tax on Bitcoin profits in India?
Yes. Any profit from selling Bitcoin is taxed at 30% flat, and 1% TDS is deducted on transactions above ₹10,000 per financial year. You must report this income while filing your ITR.
5. Can I lose money by investing in Bitcoin?
Yes. Bitcoin is highly volatile, and prices can rise or fall quickly. Only invest what you can afford to lose, and do your research before making decisions.
