- Cryptocurrency losses in India can’t be used to decrease taxes on different earnings.
- Scams usually contain impersonating faux funding platforms or exchanges.
- Cryptocurrency futures at the moment account for round 80% of India’s crypto buying and selling quantity.
Not like most international locations on this planet, crypto merchants in India face distinctive challenges as a result of authorities laws and a extremely restrictive tax atmosphere. Subsequently, it’s simple to make a mistake or two if you’re not knowledgeable about all of the cryptocurrencies occurring within the nation.
Nevertheless, some are costlier than others and Indian crypto merchants ought to pay particular consideration to the next errors.
Ignoring India’s digital forex tax guidelines
That is maybe the largest mistake one could make, as India imposes a 30% tax on earnings earned from digital digital belongings (VDAs), together with cryptocurrencies, from 2022 onwards. Moreover, a 1% tax is deducted at supply for a lot of cryptocurrency transactions over a certain quantity.
You additionally can not use cryptocurrency losses to cut back taxes on different earnings or carry ahead losses into the long run.
A standard false impression is that tax legal responsibility solely arises whenever you convert your crypto holdings into fiat forex via a financial institution withdrawal. Usually, a tax occasion happens everytime you promote or change one crypto asset for an additional. Due to this, energetic merchants might be hit with a big tax invoice despite the fact that their general portfolio hasn’t really grown a lot.
Falling for funding scams and pretend buying and selling platforms
Cryptocurrency scams in India are ever-present and on the rise and usually embrace faux funding platforms, assured return gives, change impersonations, fraudulent Telegram teams, AI-generated superstar endorsements, pig butchering scams, phishing assaults, and extra.
Victims typically switch funds considering they’re investing in a reputable crypto product, solely to lose not solely their funds but in addition the means to contact the scammer.
In line with a authorities report cited by the Hindustan Occasions in January 2026, the variety of crypto-related scams in India surged from round 1,340 in 2023-24 to greater than 11,700 within the interval from April to December final yr. This represents a big bounce of 773%, with 82% of these scammed being between the ages of 20 and 40.
go away a big amount of cash on the change
Cryptocurrency merchants usually (not simply in India) make the error of considering that crypto exchanges are like banks. Even main exchanges (like Binance and Bybit) can get hacked, go bankrupt, have withdrawals frozen, or face regulatory points.
Chainalysis reported that greater than $3.4 billion was stolen from the cryptocurrency business in 2025, with the bulk coming from exchanges.
For long-term holdings, an excellent {hardware} pockets the place you may retailer your personal keys is safer. Though cryptocurrencies is not going to be fully risk-free, dependence on central exchanges will likely be eradicated.
Buying and selling excessive leverage futures with out understanding the dangers
Many Indian merchants have moved to perpetual futures, which now account for round 80% of India’s crypto buying and selling quantity.
That stated, leveraging magnified losses and led many traders to take considerably extra danger than earlier than.
For instance, if you happen to commerce with 10x leverage, you may lose virtually your complete funding if the market strikes even 10% towards you.
Purchase meme cash with out analysis
Each market cycle creates a brand new wave of speculative tokens. Do not make the error of shopping for a token simply because it is trending on X or as a result of an influencer is advertising and marketing it. Additionally, do not ignore tokenomics and developer liquidity. These can provide you a good suggestion of the place the undertaking is heading.
Current market knowledge reveals that there’s vital promoting stress throughout meme cash, $1.2 billion to be actual.
In actuality, most meme cash by no means recuperate after their preliminary hype, with CoinGecko reporting that almost 70% of Pump.enjoyable meme cash disappeared inside 24 hours of launch.
Associated: How is India faring within the world digital forex regulation race?
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