Is Binance Legal in India in 2026? FIU Registration, Tax and Safety Explained
Using Binance is not banned in India and the exchange is registered with FIU-IND, but crypto remains unregulated. Here is what that means for tax, safety and your money.
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Is Binance legal in India? Using Binance is not banned in India. Crypto itself is not prohibited, though it is not legal tender and the government describes it as unregulated, and Binance is registered with India’s Financial Intelligence Unit (FIU-IND) as a reporting entity under the anti-money-laundering law. That registration came after FIU-IND fined Binance Rs 18.82 crore in June 2024. Registration is not a licence or a guarantee, though: crypto in India has no deposit insurance and no dedicated investor-protection law, and your profits are taxed at a flat 30% plus surcharge and cess.
Quick summary
| Question | Short answer |
|---|---|
| Is crypto banned in India? | No. The Supreme Court set aside RBI’s 2018 banking restriction on 4 March 2020. The government describes crypto as unregulated. |
| Is crypto legal tender? | No. The government has said it does not recognise crypto as legal tender. |
| Is Binance registered in India? | Yes, with FIU-IND as a reporting entity under PMLA (Binance announced it on 15 August 2024; the government listed it in Parliament in December 2024). |
| Was Binance penalised? | Yes. FIU-IND fined it Rs 18.82 crore on 19 June 2024 for serving Indian users without meeting PMLA obligations. |
| Tax on crypto profits | Flat 30% plus surcharge and cess; losses can’t be set off; 1% TDS on transfers above limits. |
| Is my crypto insured? | No. DICGC deposit insurance does not cover cryptocurrencies. |
Is crypto legal in India?
No Indian law bans individuals from buying, holding or selling crypto. It is taxed and covered by anti-money-laundering rules, but the government describes it as unregulated, so it has none of the protections of shares or bank deposits. Three official positions explain where it stands:
- Not banned: on 6 April 2018 the Reserve Bank of India told banks and other regulated entities not to deal in virtual currencies. On 4 March 2020 the Supreme Court set that circular aside in Internet and Mobile Association of India v. Reserve Bank of India. In May 2021 RBI told banks the 2018 circular is no longer valid and cannot be cited, while asking them to keep doing normal KYC and anti-money-laundering checks.
- Not legal tender: the government told the Lok Sabha in July 2019 that it has not recognised crypto currencies as legal tender.
- No dedicated crypto law yet: in August 2024 the government told Parliament that crypto assets are unregulated and that there was no proposal for a law to regulate their sale and purchase. In December 2024 it said a discussion paper may follow, but with no timeline for comprehensive rules.
RBI has warned since 2013 about the risks of virtual currencies, and since 2017 it has said it has not licensed any entity to deal in them. It lists financial, legal, customer-protection and security risks for users.
Also read: Reddit Login Required: Logged-In-Only Tests Start Outside the US
What FIU registration means for Binance
On 7 March 2023 the Finance Ministry brought “virtual digital asset” (VDA) businesses under the Prevention of Money Laundering Act (PMLA). Any business that exchanges crypto for rupees or other crypto, transfers crypto, or holds it for customers must register with FIU-IND and follow reporting and record-keeping rules. The government has said this obligation is based on the activity, not on having an office in India, so offshore exchanges serving Indians are covered too.
FIU registration is about preventing money laundering. It is not a licence that guarantees an exchange’s safety, and it does not protect your deposits.
Binance in India: timeline
| Date | What happened |
|---|---|
| 7 Mar 2023 | Crypto businesses brought under PMLA; FIU-IND registration required |
| 28 Dec 2023 | FIU-IND issued show-cause notices to nine offshore exchanges including Binance, and asked the IT Ministry to block their websites |
| 19 Jun 2024 | FIU-IND fined Binance Rs 18,82,00,000 (Rs 18.82 crore) for breaching PMLA reporting and record-keeping duties |
| 15 Aug 2024 | Binance announced its registration with FIU-IND and said its website and app were fully available to Indian users again |
| 2 Dec 2024 | Government told the Lok Sabha that 47 crypto businesses were registered with FIU-IND; the list includes Binance International Limited |
| Oct 2025 and Sep 2026 | FIU-IND acted against other unregistered offshore exchanges; Binance was not named in those notices |
We could not find a live public list of registered crypto businesses on the FIU-IND website, so the December 2024 parliamentary answer is the latest official list we found that names Binance. In October 2025 the government said 50 crypto service providers had registered with FIU-IND.
How crypto is taxed in India
The Income Tax Department’s guide on virtual digital assets says income from transferring crypto is taxed at a flat 30% plus surcharge and cess, with no deduction except the cost of acquisition. Under Section 115BBH of the Income-tax Act, 1961 (which applies to income up to tax year 2025-26), a loss on crypto cannot be set off against any other income or carried forward.
- 1% TDS: tax is deducted at source at 1% on payments for transferring crypto (Section 194S of the 1961 Act), or 20% if no PAN is available. No TDS is due until the payer’s total payments in the year cross Rs 50,000 if the payer is a “specified person” (an individual or HUF with no business or professional income, or with turnover up to Rs 1 crore or professional receipts up to Rs 50 lakh), or Rs 10,000 for any other payer. When an exchange pays the seller, the exchange is responsible for deducting it.
- Reporting: crypto income is reported in Schedule VDA of the ITR (ITR-2, ITR-3 and others).
- New Income-tax Act, 2025: it came into force on 1 April 2026. Under the new Act, TDS on payments for crypto transfers is covered by section 393(1), and crypto is defined in section 2(111). Ask a chartered accountant how the 30% rule applies to your income from tax year 2026-27.
GST authorities also treat crypto exchange services as taxable. In December 2024 the government told Parliament that GST officers had detected Rs 824.14 crore of evasion across 17 crypto exchanges, including Rs 722.43 crore at Nest Services Limited, a Binance group company.
Is your money safe on Binance?
Legal and safe are two different questions. On 30 October 2026 Binance said its hot wallets had been compromised, with an estimated impact of about $6.3 billion, and that it would absorb the losses so they fall on Binance, not its users. It said about $3 billion had been frozen on-chain, that deposits kept working, and that withdrawals were suspended while it planned a phased restart. In an update on 31 October, Binance said it had covered about 90% of the stolen amount, published a new Proof of Reserves snapshot, and was on track to reopen withdrawals on 1 November. Check Binance’s official announcements page for the current withdrawal status, and read our full report on the Binance hack and what it means for Indian users.
- No deposit insurance: DICGC insures bank deposits up to Rs 5 lakh, but its list of what is not covered includes cryptocurrencies.
- No investor-protection fund: there is no statutory compensation scheme for crypto in India, so if an exchange fails, recovery depends on the exchange’s own resources and any insolvency or court process.
- Protect your own account: turn on an authenticator app or passkey, an anti-phishing code and the withdrawal whitelist. Our step-by-step guide shows how: How to secure your crypto exchange account in India.
- Report fraud fast: call the national cyber fraud helpline 1930 or file a complaint at cybercrime.gov.in, run by the Ministry of Home Affairs.
Frequently asked questions
Is it illegal to use Binance in India?
Using Binance is not banned in India. Crypto is not prohibited, and Binance is registered with FIU-IND as a reporting entity. You must still pay tax on gains and report them in your income tax return.
Why did India fine Binance?
FIU-IND fined Binance Rs 18.82 crore in June 2024 for serving Indian users without meeting its reporting and record-keeping obligations under section 12 of the Prevention of Money Laundering Act.
How much tax do I pay on crypto profit in India?
The Income Tax Department says crypto income is taxed at a flat 30% plus surcharge and cess, with only the purchase cost deductible. Losses cannot be set off against other income, and 1% TDS applies on transfers above the yearly limits.
Is crypto on an exchange insured in India?
No. DICGC deposit insurance covers bank deposits up to Rs 5 lakh, and it lists cryptocurrencies among the things it does not cover.
Bottom line
Using Binance is not banned in India, and Binance is registered with FIU-IND, but crypto remains unregulated, uninsured and heavily taxed. Treat any exchange balance as money at risk, secure your account properly, keep records for your tax return, and follow official announcements rather than social media posts. This article is general information, not legal, tax or investment advice; rules can change, so speak to a qualified professional about your situation.
Sources
- RBI: Customer Due Diligence for transactions in Virtual Currencies (31 May 2021)
- PIB, Ministry of Finance: FIU-IND action against offshore VDA service providers (28 Dec 2023)
- FIU-IND: Order No. 10/DIR/FIU-IND/2024 against Binance (19 Jun 2024)
- Income Tax Department: Taxation of Virtual Digital Asset
- DICGC: Guide to Deposit Insurance
- Gazette of India: S.O. 1072(E), 7 March 2023 (VDA businesses under PMLA)
- Lok Sabha Unstarred Question 2167, 5 August 2024 (crypto unregulated)
- Lok Sabha Unstarred Question 966, 2 December 2024 (registered VDA service providers, GST)
- Income Tax Department: TDS on transfer of virtual digital assets
- Binance: Security Incident Recovery Update #3 (31 October 2026)
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