Cryptocurrencies like Bitcoin are digital assets that exist only in electronic form, raising questions about how (or whether) Indian law treats them as “property.” In India’s recent history, the government and central bank have repeatedly warned that cryptocurrencies are not legal tender or coins, for example, Finance Minister Arun Jaitley made this clear in 2017. The Reserve Bank of India (RBI) has also cautioned investors since at least 2013 that Bitcoin and similar “virtual currencies” carry risks and are unauthorized by any monetary authority. In 2018 the RBI even banned banks from servicing crypto businesses, but the Supreme Court struck down that circular in March 2020 as lacking legal basis. This means cryptocurrencies can be traded again, but they remain neither official currency nor fully unregulated. Recently, Indian courts have begun debating whether crypto should be treated as a form of property a move with big implications for taxes, inheritance, contracts, and more.

What Does “Property” Mean in Indian Law?

 Under Indian law, “property” is broadly defined. Courts have long held that property includes “every species of valuable right and interest” and not just land or physical objects. For instance, in Ahmed G.H. Ariff vs CWT and Jilubhai Nanbhai Khachar vs State of Gujarat, the Supreme Court described property as an aggregate of rights encompassing ownership, the right to possess, use, and exclude others. In this view, anything with measurable value that can be owned or transferred may qualify as property. Applying to this broad test, judges have begun to consider whether intangible things like crypto tokens can fit into that category. Notably, Section 2(47A) of the Income Tax Act now explicitly defines a “virtual digital asset” to include any digital code, token or “representation of value” that can be transferred, stored or traded electronically. This tax-law definition itself acknowledges crypto as a kind of digital property, though it does not by itself confer legal rights.

Key Court Rulings: Cryptocurrency as Property

In a watershed October 2025 decision, the Madras High Court held that cryptocurrencies qualify as property under Indian law. The case arose after a WazirX exchange hack left an investor’s XRP holdings frozen.

 Justice N. Anand Venkatesh’s ruling explicitly states: “There can be no doubt that ‘cryptocurrency’ is a property. It is not a tangible property nor is it a currency. However, it is a property, which is capable of being enjoyed and possessed… It is capable of being held in trust.”.

In other words, crypto is not paper money, but it is an asset you can own, use and even entrust others (like a bank or exchange). The court drew on earlier definitions of property and noted that crypto tokens are recorded data on a blockchain that are definable, identifiable, transferable, and under the exclusive control of their owner. It also pointed out that Indian tax law already treats crypto as “virtual digital assets,” and that they are not merely speculative trades. This decision aligns with similar rulings worldwide.

For example, the U.K. and Singapore courts have called crypto a form of property, and even the New Zealand High Court held in Ruscoe v. Cryptopia that crypto assets are intangible property held on trust. In India too, another High Court (Bombay HC) recently noted that digital assets held by exchanges are “meant to be held in trust” for the owners. These developments suggest a judicial trend: crypto is increasingly seen as property as a legally protectable right or asset rather than money.

Implications for Investors

If cryptocurrencies are treated as property, this affects how they are taxed, inherited, and enforced in contracts and disputes.

·      Taxation: India already taxes crypto gains as if they were income from assets. Since 2022, profits from selling or swapping crypto are taxed at a flat 30% (plus applicable surcharges and cess) under Section 115BBH of the Income Tax Act. Losses on crypto cannot be set off against other income, and only the acquisition cost can be deducted when calculating gains. In addition, the law imposes a 1% Tax Deducted at Source (TDS) on any transfer of crypto, meaning exchanges must deduct 1% of the transaction value when users buy or sell. As of July 2025, India also applies an 18% GST on crypto trading and related services (like brokerage or exchange fees). These rules treat crypto much like a property or stock: gains are fully taxed; trades carry compliance burdens, and exchanges must register and report transactions. For investors, this means keeping meticulous records and paying hefty taxes, as if crypto were a financial asset.

·      Inheritance and Wills: Treating crypto as property means it can be included in a person’s estate. In principle, cryptocurrencies should pass to heirs under the Hindu Succession Act, Indian Succession Act or personal laws just as any other asset would. While there is no specific inheritance law for digital currencies, if crypto is recognized as “property,” one can name coins or wallets in a will. In practice, heirs need access to the deceased’s private keys or accounts for a technical challenge, but legally, those coins would be part of the estate. Courts may also allow trusts or custodial arrangements for crypto assets, as hinted by the trust's findings in recent judgments. Overall, property recognition suggests heirs have a clear right to inherit crypto holdings.

·      Contracts and Commercial Transactions: If crypto counts as property, it can be the subject of contracts like any asset. People could agree to transfer crypto in exchange for goods or services. However, India’s law makes it clear that crypto is not legal tender. This means businesses are not required to accept payment in crypto. Anyone accepting crypto does so by private agreement, not legal obligation. For example, a merchant could accept Bitcoin for a sale, but if a dispute arises (say, if the merchant refuses delivery), Indian courts may be asked to enforce the deal using property or contract law. There is little precedent yet, but in theory a contract for crypto payment could be enforceable. Bankruptcy or debt recovery rules could also treat crypto as an asset to be seized or divided among creditors. On the flip side, crypto’s volatility and the lack of formal regulation mean businesses remain cautious. Banks and companies often avoid crypto payments due to compliance fears, as even the RBI has warned that dealing in crypto is risky.

·      Asset Protection and Fraud: Recognizing crypto as property means holders have legal remedies against theft, fraud or mismanagement. For instance, the Madras HC decision noted that declaring crypto as property “enables investors to seek protection against theft and fraud”. If an exchange is hacked or a platform goes bust, a victim could ask courts to recognize and return the stolen or lost coins as their property. The judgment specifically placed a fiduciary duty on exchanges holding user coins “in trust”, raising standards for how exchanges must safeguard assets. This could help investors in legal disputes over custody or ownership.

 In short, calling crypto “property” means treating it like any asset: taxable, inheritable, and enforceable. But because it’s digital and not backed by law like currency, many practical wrinkles remain.

 Legal and Regulatory Challenges

Despite these developments, India faces major challenges in regulating cryptocurrency:

·       Lack of Clear Legislation: As of now, there is no specific law legalizing private cryptocurrencies in India. The Union government has considered bills, but none have passed. A draft 2019 bill would have banned almost all crypto activities (mining, holding, trading) with jail terms up to 10 years. However, that bill was never enacted. A later draft (circa 2021) proposed a similar ban on private crypto and creation of an official digital currency, but it too has stalled. In practice, cryptocurrencies operate in a legal grey zone: neither fully legal assets nor explicitly outlawed (beyond certain anti-money-laundering rules). This uncertainty makes businesses and investors uneasy.

·      Regulatory Ambiguity: Multiple government bodies have issued mixed messages. The RBI maintains that crypto is not money and has repeatedly warned of financial risks. SEBI (the markets regulator) has so far steered clear of regulating crypto under securities law. Finance Ministry officials have also been cautious; Reuters reports that the government, despite drafting a ban bill in 2021, chose not to proceed with it. In 2023 (during India’s G20 presidency) officials called for international crypto standards, but domestic policy papers have been delayed pending global consensus. Most recently, authorities have focused on registration and compliance rather than a blanket ban. For example, the Income Tax Act treats crypto as a taxable “VDA”, and the Financial Intelligence Unit (FIU) now requires all Virtual Digital Asset Service Providers (exchanges) to register and follow AML/CFT rules.

·      Enforcement Issues: Cryptocurrencies are decentralized and can be traded on foreign platforms, making enforcement of Indian rules difficult. The FIU in 2025 issued notices under the Prevention of Money Laundering Act to 25 offshore crypto exchanges used by Indians. It reported that around 50 exchanges have formally registered for AML compliance, while others are identified as operating illegally. This shows that regulators are trying to rein in cross-border crypto flows, but it remains a challenge. There are also unanswered questions about consumer protection: in traditional finance, laws ensure banks compensate customers on fraud or mis-selling, but there is no equivalent crypto regulator or insurance.

·      Banking Restrictions and Compliance: Even after the 2020 Supreme Court verdict, some Indian banks remain wary of crypto. In 2020, the RBI had to tell banks to stop citing the old ban when warning customers away from crypto. Yet reports of exchanges being unable to link bank accounts or process INR deposits persist. This “informal” banking freeze makes it hard for crypto businesses to operate smoothly. At the same time, crypto investors face hurdles: high taxes and tight reporting (TDS, mandatory exchange registration) mean that many trades move to peer-to-peer or foreign platforms to evade rules, which in turn raises money-laundering concerns.

Overall, India’s crypto regime is currently ambiguous. On one hand, courts affirm that crypto can be owned and traded; on the other, regulators treat it with suspicion and have not built a clear legal framework. The result is a piecemeal approach: banning some activities (unregulated exchanges, unregistered platforms), taxing others heavily, and leaving much to judicial interpretation.

Recent Developments and Policy Stance

Several key developments give insight into India’s position on crypto-as-property:

Supreme Court (2020): The landmark Internet and Mobile Association of India vs RBI case quashed the RBI’s 2018 banking ban. The Court acknowledged that cryptocurrencies are not legal tender but agreed they can be treated as commodities. It ruled the RBI’s circular was disproportionate and it lacked evidence of actual harm to justify banning banking services, and it violated entrepreneurs’ right to trade under Article 19(1)(g) of the Constitution. This decision did not give crypto formal legality, but it did restore banking access to crypto exchanges, effectively allowing crypto businesses to operate under normal banking law.

Budget and Tax Law: In the 2022 Union Budget, the finance minister formally introduced the concept of “Virtual Digital Assets” into Indian tax law. Section 2(47A) of the Income Tax Act now defines VDAs broadly, implicitly acknowledging crypto’s existence. The Budget also announced the steep tax regime (30% plus 1% TDS) that was enacted that year. Subsequent budgets (2023– 2025) have mostly left the tax rules unchanged, though they added measures for enforcement. Notably, from July 2025 India began levying 18% GST on crypto trading and exchange fees, further tightening the tax framework. These moves suggest the government treats crypto as a taxable property/investment, without regard to its use as currency.

Regulatory Stance (2023–2025): Recent reports indicate the government remains cautious. A Reuters investigation (Sept. 2025) found that India is “resisting a full crypto framework”, worried about systemic risks. Instead of legalizing crypto widely, officials have preferred to focus on supervision. For example, all crypto exchanges must register with the FIU and comply with AntiMoney Laundering laws. Registered global crypto exchanges have been permitted to operate in India if they register locally, but private domestic crypto assets remain heavily regulated. The same Reuters report noted that while the government once prepared a bill to ban cryptocurrencies, it ultimately never introduced it into Parliament. In fact, during India’s G20 presidency (2023) officials argued that banning crypto outright is counterproductive and advocated for a global, step by-step regulatory framework. (India even deferred a planned domestic discussion paper until after clearer U.S. crypto rules emerged).

International Comparison: India’s approach contrasts with some other countries. In the United States, the IRS explicitly treats cryptocurrency as property for tax purposes, and U.S. courts have called Bitcoin a commodity (e.g. SEC v. Ripple). The UK Law Commission has gone further, recommending in 2024 that digital tokens be recognized as a new category of personal property with tailored legal rules. Similarly, Singapore and New Zealand courts have formally classified crypto assets as property. These examples show a global trend: rather than banning, many jurisdictions are integrating crypto into existing property and financial laws. India’s recent judicial statements align with this trend, even if formal laws lag behind.

The Way Forward

Looking ahead, the recognition of crypto as property by Indian courts opens doors but also highlights what’s needed: clear legislation and balanced regulation. Experts note that once crypto is declared property, a suitable legal framework must follow so investors and businesses can operate with confidence. For instance, the Madras HC itself remarked that India has the opportunity to design rules that “encourage innovation while protecting consumers and maintaining financial stability”.

Possible steps includes issuing a detailed law or guidelines defining digital assets; licensing and supervising exchanges; clarifying how existing property laws apply to crypto (e.g. sale of goods, insolvency); and ensuring consumer safeguards. The UK’s move to legislate a new category of digital property could offer a model for India, as could coordinated international standards (like the OECD’s Crypto-Asset Reporting Framework). On the other hand, some in India worry that over-regulation could stifle innovation. The government’s current stance seems to be “proceed with caution” heavy taxes and AML rules are in place, but sweeping bans are off the table.

For investors, the message is: cryptocurrencies in India are treated as assets, not cash. That means your holdings are legally protected as property (you can own, bequeath, or sue over them), but it also means any gains will be heavily taxed, and exchanges must comply with strict rules. Given the rapidly evolving scene, users should stay updated on both court decisions and regulatory notifications.

In conclusion, India’s judiciary has taken a significant step by recognizing crypto as property. This aligns with global practice and grants crypto holders basic legal rights. However, without a clear statutory framework, many practical questions remain unresolved. Stakeholders will be watching closely as policymakers and regulators attempt to fill these gaps ideally in a way that balances innovation with investor protection.

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FAQs: Recognition of Cryptocurrency as Property Under Indian Law

1. Is cryptocurrency legal in India?

Yes, cryptocurrency is legal to own and trade in India. There is no law banning it. However, it is not recognized as a legal tender, meaning you can’t use it to pay for goods and services like rupees. The Supreme Court in 2020 struck down the RBI’s earlier ban on banking services for crypto businesses, allowing exchanges and investors to operate lawfully.

2. Is cryptocurrency considered property under Indian law?

Yes. Indian courts most notably the Madras High Court in 2025 have recognized cryptocurrency as a form of property. It’s not physical property or money, but a digital asset that can be owned, traded, and held in trust. This means crypto enjoys legal protection as an asset.

3. What does “property” mean in this context?

In Indian law, property includes any valuable right or interest that can be owned, used, or transferred. This broad definition covers both tangible and intangible assets. Cryptocurrencies fit this category because they are identifiable, tradable, and under the exclusive control of their owner.

4. What happens if someone steals or hacks my cryptocurrency?

If cryptocurrency is treated as property, it receives legal protection against theft and fraud. Victims can approach the courts to recover or claim damages. Courts have also said that exchanges hold users’ funds in trust, meaning they can be held legally responsible for negligence or mishandling.

5. Does India have a specific law regulating cryptocurrencies?

Not yet. India does not have a dedicated cryptocurrency law. However, cryptocurrencies are covered indirectly through the Income Tax Act, GST laws, and Anti-Money Laundering (PMLA) provisions. The Financial Intelligence Unit now requires all crypto exchanges to register and comply with anti-money-laundering rules.

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ABOUT THE AUTHOR

This blog is authored by Shridansh Tripathi, a second-year law student at the Department of Legal Studies and Research, Barkatullah University, Bhopal. This blog was contributed by Gaurav Saxena a corporate lawyer focusing on company law, commercial agreements, and compliance strategy. He is the Founder of SolvLegal and a dual-degree professional with expertise in Law and Engineering. A graduate of the University of Lucknow, he has a deep understanding of Contract Law, Corporate Law, Intellectual Property Rights, Information Technology Law, and Data Privacy.

DISCLAIMER

The information provided in this article is for general educational purposes and does not constitute legal advice. Readers are encouraged to seek professional counsel before acting on any information herein. SolvLegal and the author disclaims any liability arising from reliance on this content.