In July 2026, Parliament's Standing Committee on Finance recommended that India build an appropriate regulatory framework for virtual digital assets, and that until a law exists, the sector be handled through self-regulatory organisations (SROs) working under a regulator such as the RBI or SEBI. The recommendation came in the committee's report on the Securities Markets Code, reported on 27 July 2026, which described the exclusion of VDAs from the code as a "regulatory grey area".
The key thing to understand is that these recommendations are advisory. Nothing about how you buy, hold, sell or pay tax on Bitcoin changed when the report came out. Crypto is still not banned, still taxed at 30% on gains with 1% TDS, still unregulated as an asset, and platforms still register with FIU-IND. The report is a signal of where Parliament's thinking is going, not a new rule.
What the committee recommended
The committee was looking at the Securities Markets Code, a proposed law that brings India's securities rules together. VDAs are not part of it. The committee flagged that gap and made two linked suggestions:
- India should create an appropriate regulatory framework for VDAs.
- Until a dedicated law exists, an interim arrangement could work through self-regulatory organisations under a regulator such as the RBI or SEBI.
The context matters. Today India has no standalone crypto law, and no dedicated law on governance, disclosure, investor protection or grievance redressal for VDAs. The rules that do exist come from tax law and anti-money-laundering law, not from a crypto-specific act.
Self-regulatory organisations, explained
An SRO is an industry body that writes and enforces standards for its own members, usually under the supervision of a government regulator. The regulator sets the boundaries and watches. The SRO handles the day-to-day standards: codes of conduct, disclosure norms, complaint handling, and what happens to members who break the rules.
The appeal is speed and expertise. An SRO can be set up faster than a law can be passed, and people inside the industry often understand its risks in detail. The risk is that an industry body is too gentle on its own members. That is why the committee talked about SROs under a regulator, not on their own.
Why this is closer to how things already work than people think
This is my own view, from thirteen years inside the industry. When we started Unocoin in 2013, there was no rulebook for Bitcoin in India. But from the very beginning, our philosophy was that you cannot run from the government. They exist, and you have to deal with them. Never break the rules. Never be offside.
In practice that meant doing things before anyone required them. I remember about 30 people from the tax department showing up at our office around the third day of the business, when we had two employees. You learn quickly that being ready for scrutiny is part of the job.
Since then, the formal rules have arrived in layers. Tax came in 2022: 30% on VDA gains under section 115BBH and 1% TDS under section 194S. In March 2023, VDA activities were brought under the Prevention of Money Laundering Act, so platforms now register with FIU-IND as reporting entities and follow its KYC and record-keeping duties. Unocoin is registered with FIU-IND as a reporting entity under the PMLA.
An SRO under a regulator would add something the system lacks today: common standards on disclosure and complaints across platforms. To me, that is a natural next layer, not a revolution. But that is a view. What happens depends on the government, not on a committee or on me.
What stays the same: tax and FIU-IND
The report changes none of these:
- Gains from transferring a VDA are taxed at a flat 30% under section 115BBH, plus surcharge and 4% cess. Only the cost of acquisition is deductible.
- Losses cannot be set off against other income or carried forward.
- 1% TDS applies under section 194S, now section 393 under the Income-tax Act, 2025.
- Platforms serving Indian users must register with FIU-IND and do KYC.
Check the tax details for your own situation with a CA. The tax guide has the full picture.
Advisory, not binding
A parliamentary committee report is a set of recommendations to the government. The government responds and decides what, if anything, to do. If it wants a law, it brings a bill, and Parliament debates it. Each step can take a long time.
It also helps to see the other voices in the room. Earlier in July 2026, the RBI told the same committee that VDAs should not be legalised and that regulating them would create a "false perception of safety". ICAI, the chartered accountants' body, told the committee that India needs a comprehensive VDA law. The committee's report leans toward a framework, which is closer to ICAI's view than the RBI's. But again, that is a recommendation.
MP Raghav Chadha summed up the tension in February 2026 when he said the government taxes VDAs as if they are legal but regulates them as if they are illegal. The committee's report reads like an attempt to close that gap.
What to watch next
- The government's response to the report.
- The committee's separate study on VDAs, which is still under discussion.
- Whether the government publishes its crypto discussion paper. As of this writing, it has not been published.
- Whether the RBI or SEBI signals willingness to supervise an SRO.
- Tax reporting changes already in motion. Under CBDT's Crypto-Asset Reporting Framework guidance, reported in July 2026, exchanges report 2026 transactions in more detail, so your ITR should match platform records.
What it means for you this week
Very little changes in your daily life. Keep using a platform registered with FIU-IND. Keep your records. File Schedule VDA properly with a CA. Never share your OTP, password, PAN or seed phrase with anyone who contacts you.
And be careful with headlines. "Parliament wants crypto rules" can be spun as "crypto is now legal" or "crypto ban coming". Neither is true. It is a recommendation, and the rules you live by today are the same as last week.
What I would want an SRO to cover
This is my view, not a prediction. If India does create an interim SRO, these are the questions I would want it to answer for users, because they are the questions people ask me most:
- How does a platform show where customer assets are held, beyond its own statement?
- How quickly must a platform answer a complaint, and where does a user go if it does not?
- What must a platform disclose about fees, in plain words, before you trade?
- What happens to customer assets if a platform is hacked or shuts down?
Today, a lot of this depends on each platform's own choices. For example, Unocoin states that 95% of assets are held in cold storage with multi-signature wallets and regular security audits, and the site is clear that there is no independent public attestation of that figure. Common standards would let users compare platforms on the same terms. Until then, the checks are yours to run.
If you want this kind of plain reading of each development as it happens, with the documents linked, sign up for the India Bitcoin Brief. For the history of the last time a regulator tried to shut the industry out, read the Supreme Court story.
Common questions
Is India making a crypto law?
Not yet. In July 2026 a Parliament committee recommended a regulatory framework for VDAs and interim self-regulatory organisations under a regulator such as RBI or SEBI. The recommendations are advisory; the government decides whether to bring a bill.
What is an SRO for crypto?
A self-regulatory organisation is an industry body that sets and enforces standards for its members, usually under the supervision of a regulator. The committee suggested SROs under a regulator such as the RBI or SEBI as an interim step.
Did Parliament legalise crypto in 2026?
No. A committee report made recommendations; no law was passed. Crypto in India is not banned, is taxed, is unregulated as an asset, and platforms must register with FIU-IND.
Does the report change crypto tax?
No. Gains are still taxed at 30% under section 115BBH plus cess, losses cannot be set off, and 1% TDS still applies. Check your case with a CA.