Indian Compliance & Tax

How does PMLA apply to crypto businesses in India?

The Prevention of Money Laundering Act (PMLA) applies to Indian crypto businesses because, since a March 2023 notification, Virtual Digital Asset activities are treated as reporting-entity activities under the law. This means exchanges, custodians, and wallet providers must run KYC, maintain records, and report suspicious or high-value transactions to FIU-IND. For example, a platform handling crypto-to-INR conversions must verify each user's identity and monitor for unusual patterns. PMLA targets the prevention of money laundering and terrorist financing, so it sets conduct standards for the business rather than taxing the individual investor.

This is general information, not tax advice. Tax rules change and depend on your individual circumstances — verify the current rules or consult a qualified tax professional before acting.