Michelle Legge
By Michelle LeggeHead of Crypto Tax Education
Updated May 22, 2024
This article has been fact checked and reviewed as per our editorial policy.

How to Buy Cryptocurrency in India in 3 Steps

Around 20 million people in India have hopped on the crypto bandwagon - making it one of the most popular investments in the last year! If you want a slice of the Bitcoin pie, here’s how to buy cryptocurrency in India… and what you need to know for your taxes.

How to buy crypto in India in 3 simple steps

Wondering how to invest in cryptocurrency in India? It starts with buying your first crypto investments - whether that's Bitcoin or another cryptocurrency. Buying crypto is easier than ever as it moves closer and closer toward mainstream adoption. In fact, you can buy crypto in three simple steps:

  1. Find a trusted exchange.

  2. Pick your cryptocurrency.

  3. Buy your crypto.

Let’s take a look at each step of how to buy cryptocurrency in more detail.

How to choose a crypto exchange

There are a huge number of Indian crypto exchanges to pick from - but not all crypto exchanges are made equal. So how do you know which is the best crypto exchange to use?

In general, you want to focus on a few things when choosing a crypto exchange:

  • Security

  • Cryptocurrencies available

  • Fees

  • Deposit and withdrawal facility (fiat & crypto)

First up, crypto exchanges are a huge target for hackers. That means you need to know your crypto assets are safe. That means choosing a safe crypto exchange - and we can actually help with that. Check out our safest and best crypto exchanges in India guide, where you'll find a list of some of the trustworthy Indian crypto exchanges to research.

Once you've made sure you've chosen a safe and secure crypto exchange, you'll want to check out that the exchange offers the cryptocurrency you're interested in investing in. Most exchanges offer market-leading cryptocurrencies as a minimum, but if you're looking for a more obscure altcoin to invest in, you'll need to find an exchange that offers the asset you're after.

Finally, you'll want to check out fees for the exchange you choose. Most exchanges have similar investment fees, although there are definitely exchanges that sit on the higher and lower end of the average. Especially if you're investing large amounts, these fees can get quite high, as they're usually a percentage of your overall purchase price.

How to choose a cryptocurrency

It goes without saying no crypto investment is risk-free. The decentralized and unregulated nature of crypto means by their very nature they could be considered a high-risk investment. This said, sometimes with high risk comes high reward - and many early adopters have reaped those rewards. So how do you know which cryptocurrency is the best investment when there are more than 14,000 cryptocurrencies to choose from?

There's no perfect guide for this, but some factors to consider when choosing a cryptocurrency to buy include:

  • Market capitalization: Market capitalization refers to the total dollar market value of all the coins that have been mined. It can be helpful in assessing the popularity of a given cryptocurrency - as well as helpful in determining the potential profitability of an investment when combined with maximum and total supply.

  • Maximum and total supply: Total supply refers to the total number of coins currently in the market - whether that's circulating or locked. Meanwhile, maximum supply (or fixed supply) refers to the maximum number of coins that will ever be in supply for a given cryptocurrency. For example, the Bitcoin total supply is around 19,170,000 currently. While the Bitcoin maximum supply is 21,000,000. This means there will only ever be 21 million Bitcoins. This scarcity often means the value will be driven up, however, too high a maximum supply can also mean the value will be driven down.

  • Whitepaper: Cryptocurrencies aren’t just an alternative to fiat currencies - or not all of them are anyway. Many cryptocurrencies are actually focused on solving traditional financial market issues through technology. For example, the Solana blockchain aims to be a scalable blockchain to execute smart contracts - pieces of code that automatically execute financial transactions between individuals with no need for a third party like a bank. You can find out all of this information in the blockchain’s whitepaper. All reputable projects should have a whitepaper and a roadmap indicating development plans and targets.

How to buy cryptocurrency on Indian exchanges

Now you know the exchange you want to use and the cryptocurrency you want to buy - the only thing left to do is buy your crypto. The steps on each exchange will vary slightly, and for the sake of time, we won’t list steps for all of them, but here are some step-by-step instructions on how to buy for some of India’s most popular exchanges including how to buy crypto on Binance, how to buy crypto on WazirX, and how to buy crypto on CoinDCX.

How to buy cryptocurrency on Binance India

Binance is the largest crypto exchange in the world, where millions of Indian investors can buy crypto through P2P trading. Just follow the below steps to buy your first crypto asset on Binance.

1. On the home page, go to Buy Crypto and select P2P Trading from the dropdown. Please note, the third-party payment option for WazirX is currently disabled and Simplex does not work most of the time with Indian credit cards.

Binance how to buy crypto India

2. On the P2P trading pair, select the cryptocurrency you want to buy and select INR under the Fiat dropdown. You can also customize your payment options like NEFT, RTGS, UPI, and IMPS by selecting the preferred one under the head Payment. Once you've made your selection, Binance will display a list of sellers to purchase from, all you need to do is pick a seller.

Binance how to buy crypto India

3. In our example, we'll buy USDT from a seller. You'll need to select the amount of crypto you'd like to buy, then click on Buy USDT (or the crypto you're purchasing) to proceed further.

4. On the next page, Binance will display the bank account details of the seller. You'll need to make the payment to the seller's account from your account and upload the transaction screenshot to Binance. Once the seller confirms receipt of the funds, the seller will mark your P2P trade order as approved and the purchase amount will be added to your Binance wallet.

Binance India fees & more

  • Buy method: P2P only (does not support direct bank deposit).

  • P2P charges: 0%.

  • Supported crypto assets in P2P trading: 10+.

  • Payment methods for P2P: UPI, Bank transfer, IMPS, NEFT, RTGS.

  • Crypto deposit and withdrawal: Supports many popular cryptocurrencies.

What does buying on Binance India mean for my taxes?

TDS of 1% is applicable on all P2P trades on Binance India. The buyer needs to deduct 1% TDS on the buy value and deposit it with the ITD, along with Form 26QE within 30 days from the end of the month in which the purchase was made. Buyer should also collect necessary documents like PAN Card and Aadhaar Card of the seller for his or her records.

Please note, the Income Tax Department (ITD) has not yet made the filing of form 26QE available on the Income Tax Portal. Binance is an international exchange and as a result does not comply with TDS provisions as per Indian laws.

A banner with the Koinly and Binance logos inviting crypto investors to connect their Binance account with Koinly, a crypto tax softwareWondering if buying crypto on Binance India is safe? Find out in our Best Crypto Exchanges India Guide.

How to buy cryptocurrency on WazirX

WazirX is India’s largest crypto exchange, where Indian users can buy crypto through P2P trading. Follow the below steps to buy your first cryptocurrency on WazirX.

1. To purchase your first crypto from WazirX, on the home page click on P2P. Unlike Binance, WazirX supports only USDT for P2P trading.

How to buy crypto on WazirX

2. In the Buy window, enter the USDT volume and the price per USDT, then click on Buy. WazirX will then automatically match you with sellers who are selling crypto at the same price.

WazirX how to buy crypto

3. The details of the seller, if matched, will appear on the next screen. It will contain details of the bank account and transaction remarks. You will need to make the payment from your WazirX registered bank account to the seller’s bank account and reference the transaction remarks.

WaxirX how to buy crypto

4. Once the payment is completed, upload the transaction screenshot and click on I have paid. Seller will then confirm the receipt of payment and you will receive the USDT in your WazirX wallet.

WazirX fees & more:

  • Buy method: P2P only (does not support direct bank deposit).

  • P2P charges: 0%.

  • Supported crypto assets in P2P trading: USDT.

  • Payment methods for P2P: UPI, Bank transfer, IMPS, NEFT, RTGS.

  • Crypto deposit and withdrawal: Supports only a few cryptocurrencies.

Wondering if buying crypto on WazirX is safe? Find out in our Best Crypto Exchanges India Guide.

How to buy cryptocurrency on CoinDCX

CoinDCX is India’s third largest crypto exchange where Indian investors can buy crypto via a bank deposit. Just follow the steps below to buy your first crypto on CoinDCX.

1. On the home page go to Funds and select INR Wallet from the drop-down menu.

How to buy crypto on CoinDCX

2. On the next page, select deposit INR to wallet.

How to buy crypto CoinDCX

3. Enter the amount you'd like to deposit and the method of bank transfer, then select continue to complete the bank transfer, enter the transaction reference number, and submit. Your funds will be added to your INR wallet within 1-8 hours.

How to buy crypto CoinDCX

4. Once your deposit is complete, go to the spot market on CoinDCX and purchase your cryptocurrency!

How to buy crypto CoinDCX

CoinDCX fees & more:

  • Buy method: Bank deposit.

  • Deposit fees: 0%.

  • Trading fees: 0.5% (fee details).

  • Payment methods: IMPS, NEFT, RTGS.

  • Crypto deposit and withdrawal: Support for USDT only.

Connect CoinDCX with KoinlyWondering if buying crypto on CoinDCX is safe? Find out in our Best Crypto Exchanges India Guide.

What does buying crypto in India mean for your taxes?

Buying crypto may or may not be taxed - it all depends on what you're buying your crypto with.

Buying crypto in India is subject to a 1% TDS. If you're using an Indian crypto exchange to buy your crypto, this will generally be deducted on your behalf.

But if you're buying via international exchanges like Binance, Huobi, KuCoin, and so on, this would mean the buyer would need to deduct 1% TDS and deposit it with the government with the seller's details.

If you're buying crypto with another cryptocurrency, like buying ETH with BTC, this is a taxable event according to the Indian government. The Income Tax Department views this as two separate transactions: a sell and a buy. When you sell, this is what's known as a disposal and therefore any profits are subject to tax at 30% (plus applicable surcharge and cess). In addition to this, you'll also pay 1% TDS.

When you file your tax return, your TDS deposited will be offset against your Income Tax liability (provided you've filed your TDS correctly and on time). If you have more TDS than Income Tax due, you'll be eligible for a refund.

Banner prompting investors to read the Indian crypto tax guide created by Koinly, a leading crypto tax software.

How Koinly can help with your crypto taxes

Koinly is the leading cryptocurrency tax calculator in India, as well as a market-leading portfolio tracker - helping you stay on top of your investments and your tax liability, whatever the time of year. Best of all, Koinly is completely free to use, you’ll only ever pay when you want to download a crypto tax report ahead of the tax deadline.

With Koinly - all you need to do is connect the exchanges, wallets, and blockchains you use via API or by uploading a CSV file of your transaction history. Once connected, Koinly helps you keep track of all your assets, transactions, gains and losses, income, expenses, and more. Koinly even helps you track your unrealized gains and losses to help you make more informed decisions about your crypto investments.

Sign up and try Koinly free today.

Get India crypto tax report CTA


More questions? We have you covered.

Is Binance legal in India?

Wondering if you can use Binance in India? Yes, Binance is legal in India. It sits in a regulatory grey area currently as the exchange does not fully comply with the current regulatory requirements for crypto exchanges based in India - but the government has not yet attempted to force international exchanges to comply with national legislation. Binance does however collect KYC data for users and as a highly compliant exchange, may share this information with relevant authorities in India on request. So if you're using Binance thinking you can avoid TDS - think again. You should always collect and deposit your TDS according to the guidance - as the penalties for avoiding TDS are steep.

How to buy Bitcoin in India?

We've used USDT in our examples of how to buy cryptocurrency above - but the same steps would apply to buying Bitcoin as well. Just deposit INR funds into your chosen crypto exchange, find the spot market or P2P market to buy Bitcoin, and complete your transaction.

Where to buy Bitcoin in India?

You can buy Bitcoin on many popular Indian exchanges including CoinDCX, WazirX, Bitbns, and ZebPay.

Can we buy cryptocurrency in India?

Yes. Indian residents can buy cryptocurrency in India legally as cryptocurrency is not banned in India. Investors however should be aware of the tax implications of buying cryptocurrency, including the 1% TDS. Generally, Indian exchanges collect TDS on behalf of users, but international exchanges or P2P platforms may not. As such, you'll need to understand your reporting requirements for buying crypto in some instances. You can learn more in our India Crypto Tax Guide.

The information on this website is for general information only. It should not be taken as constituting professional advice from Koinly. Koinly is not a financial adviser. You should consider seeking independent legal, financial, taxation or other advice to check how the website information relates to your unique circumstances. Koinly is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by use of this website.