How India’s Vda Review May Strengthen Protections Across The Crypto...
From custody standards to stablecoin oversight, India’s VDA review may help shape an investor-focused framework that brings crypto rules closer to global norms.
With more than 100 million crypto users, India still lacks a comprehensive virtual digital asset (VDA) law. Existing rules address taxation and AML obligations, but they do not fully cover consumer protection or broader market conduct.
Issues under discussion include the absence of unified investor-protection rules, unregulated trading practices and concerns that India’s 30% tax plus 1% TDS regime is pushing users to offshore platforms.
Stakeholders are discussing a risk-based VDA framework, licensing requirements for exchanges and custodians, conduct-of-business standards, RWA-specific regulations and improved data and reporting systems.
Proposed safeguards include clearer custody norms, defined insolvency procedures, stronger disclosure standards, reserve transparency and closer oversight of leverage and liquidity risks.
India is home to more than 100 million crypto users, many of whom are younger and highly tech-savvy. Yet the country still lacks clear and comprehensive regulations for virtual digital assets (VDAs).
A formal review of VDA policies is now underway. This could shift the current system, which focuses mainly on high taxes and basic Anti-Money-Laundering (AML) rules, toward a stronger framework that prioritizes investor protection.
This article outlines the VDA regulations currently in place in India as of Nov. 24, 2025. It explains what the VDA review involves, highlights the key issues under examination, summarizes the regulatory frameworks being considered and discusses the potential benefits the review could deliver.
In India, the term “VDA” is defined in the Income Tax Act through amendments introduced in 2022. It includes cryptocurrencies, non-fungible tokens (NFTs) and any other digital assets the government may specify. VDAs are not legal tender, but individuals are allowed to buy, sell and hold them.
India applies strict taxes on VDAs, including a flat 30% tax on profits from their transfer and a 1% tax deducted at source on transactions above certain limits. Losses from VDAs cannot be offset against other income.
Source: CoinTelegraph
