1. Introduction
The rapid adoption of cryptocurrency in India has sparked intense debate over its legal status, particularly its classification as property. Despite its increasing use in transactions and investments, India lacks a clear legal framework defining whether cryptocurrency qualifies as property under existing laws. This ambiguity creates challenges in ownership rights, taxation, regulation, and legal protection, making it imperative to analyse its classification within India's legal system.
Cryptocurrency, such as Bitcoin, Ethereum, stablecoin, tokens and other digital assets, operates on decentralized blockchain networks, distinguishing it from traditional financial instruments. Unlike physical property or fiat currency, crypto exist solely in digital form, raising legal questions about whether they can be categorized as movable or intangible property under Indian law. The classification of cryptocurrency as property would have far-reaching implications, affecting taxation policies, enforcement of contracts, asset recovery in disputes, and anti-money laundering regulations.
This article examines whether cryptocurrency fits within the existing definitions of property under Indian laws, such as the Transfer of Property Act, 1882; Sale of Goods Act, 1930; and Income Tax Act, 1961. It also examines global approaches to crypto classification in jurisdictions such as the United States, United Kingdom, and Singapore, providing insights into how India can adapt its regulatory stance. Ultimately, by analysing judicial interpretations, legislative frameworks, and regulatory precedents, this article aims to determine whether cryptocurrency can be legally classified as property in India or if specific legal reforms are necessary.
2. Legal Framework of Property in India
2.1. The Transfer of Property Act, 1882
The word "property" has not been defined in the Transfer of Property Act, 1882 (TPA) but has been used in its widest and most generic sense. Property is a legal term denoting every kind of interest or right that holds economic value.
Property in Indian law is broadly classified into:
- Movable Property – Assets that can be transferred from one place to another without losing their essential character.
- Immovable Property – Assets that are permanently attached to the earth, such as land and buildings.
2.2. Movable Property and Cryptocurrency
Unlike immovable property, movable property is defined more broadly under Indian law. While the Transfer of Property Act, 1882 does not provide a definition for 'movable property', Section 3(36)1 of the General Clauses Act, 1897 states that movable property includes all property except immovable property. It can be inferred from the definition of the 'movable property' under the General Clauses Act, 1897 that it includes intangible property as well. Additionally, under Section 2 (21) of Bharatiya Nyaya Sanhita, 2023 (BNS) 'movable property' includes property of every description, except land and things attached to the earth or permanently fastened to anything which is attached to the earth.2 It is interesting to note that in Section 2 (21) of BNS the word "corporeal" has been removed as compared to its corresponding Section 22 of Indian Penal Code, 1860.3
2.3. Can Cryptocurrency Be Considered Movable Property?
Since cryptocurrency does not fall under immovable property, it may be classified as movable property under Section 3(36) of the General Clauses Act, 1897. However, cryptocurrency is intangible and exists in digital form, raising questions about whether it qualifies as corporeal property. While movable property generally includes physical assets, Indian courts have recognized intangible assets, such as shares and intellectual property, as movable property. The Hon'ble Supreme Court in Vikas Sales Corporation and Ors. vs. Commissioner of Commercial Taxes and Ors.4, while holding movable properties to include both corporeal and incorporeal properties held as follows:
"21. The above material uniformly emphasises the expansive manner in which the expression "property" is understood. Learned counsel for the petitioners brought to our notice the meanings of the term "property" set out in Chapter-13, "The Law of Property", in Salmond's Jurisprudence (12th Edition, 1966). In this chapter, several meanings attributed to "property" are discussed in extenso, to all of which it may not be necessary to refer. Suffice to say that property is defined to include material things and immaterial things (Jura in re propria) and leases, servitudes and securities etc. (jura in re aliena). The material things are said to comprise land and chattels while immaterial things include patents, copyrights and trade marks, which along with leases, servitudes and securities are described as incorporeal property. The expression "movable property" is stated to include (Page 421) corporeal as well as incorporeal property. Debts, contracts and other choses-in-action are said to be chattels, no less than furniture or stock-in-trade. Similarly, patents, copyrights and other rights in rem which are not rights over land are also included within the meaning of movable property. We are unable to see anything in the said Chapter-13, which militates against the meanings ascribed to the said expression in the judicial dictionaries referred to above. Indeed, they are consistent with each other."
Therefore, cryptocurrency can potentially be classified as intangible movable property under Indian law, though specific legal recognition is still required.
2.4. Sale of Goods Act, 1930
The Sale of Goods Act, 1930 (SGA) governs the sale and purchase of goods in India. Under Section 2(7) of the Act, "goods" are defined as every kind of movable property other than actionable claims and money. This includes stock and shares, growing crops, grass, and things attached to or forming part of the land that are agreed to be severed before sale or under the contract of sale.
2.4.1. Can Cryptocurrency Be Considered "Goods"?
Given that cryptocurrency is not immovable property, its classification under the SGA turns on whether it qualifies as movable property. The SGA does not define 'movable property' hence, the definition of movable property under General Clauses Act, 1897 should be read here to understand if cryptocurrency can be categorised as 'goods' under SGA. While the Act excludes money, it does not exclude digital assets such as cryptocurrency, which are not recognized as legal tender. Therefore, crypto may not fall under the exclusion of "money" and could potentially be included within the broad ambit of "goods".5
Indian courts and regulators have not yet definitively ruled on this issue, but persuasive foreign jurisprudence exists. For instance, in the United Kingdom, the UK Jurisdiction Taskforce Legal Statement on Crypto-assets and Smart Contracts (2019) recognized crypto-assets as property capable of being owned and transferred6. Similarly, in the case of AA v Persons Unknown7, the High Court of England and Wales held that Bitcoin is property.
The analogy can be extended to Indian law. Just like shares and software, which are intangible but are treated as goods and movable property, cryptocurrency could similarly be considered goods under Indian law. The treatment would depend on the purpose for which cryptocurrency is being traded or used, whether as a commodity, store of value, or investment asset. However, the lack of a statutory definition of cryptocurrency under the Act creates regulatory ambiguity. Legislative intervention or judicial clarification would be necessary to conclusively include crypto under the definition of "goods."
2.5. Income Tax Act, 1961
The Income Tax Act, 1961 did not originally define cryptocurrency or virtual digital assets (VDAs). However, the Finance Act, 2022 brought significant clarity to the taxation of VDAs, marking a formal recognition of cryptocurrency within India's fiscal framework. Through the insertion of Sections 115BBH, 194S, and 2(47A), the Income Tax Act now explicitly governs the taxation of income from VDAs, which include cryptocurrencies such as Bitcoin, Ethereum, and stablecoins and other tokens.
2.5.1. Definition of Virtual Digital Asset (VDA)
As per Section 2(47A) of the Income Tax Act 1961, a virtual digital asset means:
"(a) any information or code or number or token (not being Indian currency or foreign currency), generated through cryptographic means or otherwise, by whatever name called, providing a digital representation of value exchanged with or without consideration, with the promise or representation of having inherent value, or functions as a store of value or a unit of account including its use in any financial transaction or investment, but not limited to investment scheme; and can be transferred, stored or traded electronically;
(b) a non-fungible token or any other token of similar nature, by whatever name called;
..."
The definition of VDA is further broadened to include any other digital asset that the Central Government may specify by notification in the Official Gazette, and the Government likewise retains the power by similar notification to exclude any such asset from this definition subject to conditions it prescribes.
2.5.2. Classification of Cryptocurrency as "Property"
Although the Income Tax Act, 1961 does not explicitly define cryptocurrency/ VDA as "property", its inclusion under the heads of income and treatment as a capital asset under Section 2(14)8 of the Income Tax Act, 1961 supports the view that it is recognized as a form of intangible movable property. The capital asset definition includes "property of any kind," and Indian jurisprudence has broadly interpreted this to include intangible assets such as goodwill, patents, and shares—analogous to the nature of cryptocurrencies.9
The Income Tax Appellate Tribunal, Jodhpur in Raunaq Prakash Jain vs. Income Tax Officer, Ward-1 while deciding whether the sale of Bitcoin should be assessed as capital gains or income from other source held as follows:
"Though crypto currency / virtual digital asset is also not a currency but it is not an asset within the meaning of section 2(14) of the Act. The amendment made in the Finance Act, 2022 has defined Virtual Digital Asset (VDA) u/s 2(47A) of the Act wherein the name given is of virtual digital assets. Thus, considering the plan vanilla meaning before the amendment as is to be understood at the time of purchase & sale of crypto currency (bitcoins) which is a right of the assessee attached to the investment made. If we consider the definition of capital asset as given in section 2(14) of the Act which say that "Property of any kind held by an assessee, whether or not connected with his business or profession." Explanation 1 to this sections reads that "property" includes and shall be deemed to have always included any right in or in relation to an Indian company, including right of management or control or any other right whatsoever. Thus all rights are property and thereby the right of the assessee in Bitcoin though a virtual assets is a capital asset. Therefore, the AO is incorrect in holding that to qualify as capital asset one should actually own something as property in as much as even if a person has a right or claim on a property it is also a capital asset u/s 2(14) of the Act. Further section 2(47) of the Act defines transfer in relation to a capital asset to include sale, exchange or relinquishment or extinguishment of any right therein. Therefore in the present case the gain on sale of bitcoin which was acquired by the assessee during FY 2015-16 for Rs. 5,05,155/- and sold in FY 2020-21 for Rs. 6,69,49,620/- results into capital gain and not chargeable under the head income from other sources. We note that Finance Act, 2022 w.e.f. 01.04.2022, the section 2(47A) has been inserted thereby the Virtual Digital Asset meaning was assigned and that including the underlying assets Bitcoins. Thus even the law maker has to clarify that virtual digital asset may be a capital asset and that assets to be treated as income to be taxed as special rate.
Therefore, it can be said that at least for the purposes of Income Tax, cryptocurrency can be considered as property which may be inferred same for other purposes as well.
3. Judicial and Regulatory Precedents on Crypto Classification Across Different Jurisdictions
3.1. India's Legal Position on Cryptocurrency as Property
India has not yet issued a definitive ruling explicitly classifying cryptocurrency as property under existing legal frameworks except for Income Tax purpose. However, judicial and regulatory developments indicate a gradual recognition of cryptocurrencies within the legal system.
The Hon'ble Supreme Court in Internet and Mobile Association of India v. Reserve Bank of India10 played a crucial role in shaping India's crypto landscape. The Hon'ble Supreme Court of India overturned the RBI's 2018 circular that restricted banks from dealing with cryptocurrency exchanges. The Hon'ble Court ruled that the RBI's action was disproportionate and lacked sufficient legal backing, suggesting that cryptocurrencies should be regulated rather than outright banned. Although the ruling did not classify cryptocurrencies as property, it signalled the judiciary's willingness to accommodate digital assets within the existing legal framework.
From a regulatory standpoint, India has taken steps toward recognizing crypto as a taxable digital asset. The Finance Act, 2022, introduced a 30% tax on gains from virtual digital assets (VDAs), along with a 1% Tax Deducted at Source (TDS) on crypto transactions. This taxation treatment aligns with the recognition of cryptocurrencies as an asset rather than a currency, reinforcing the notion that crypto can be considered movable property under Indian law.
Despite these developments, the lack of explicit legislation defining cryptocurrencies as property creates legal uncertainty. A formal notification or amendment in laws like the Transfer of Property Act, 1882, or a dedicated Crypto Asset Regulation could provide much-needed clarity.
3.2. United Kingdom: Legal Recognition of Cryptocurrency as Property
The UK has taken a progressive approach in recognizing cryptocurrencies as intangible property with enforceable proprietary rights. This legal stance was established in the UK Jurisdiction Taskforce's (UKJT) Legal Statement on Crypto-assets and Smart Contracts (2019)11, which provided the first official consultation paper discussing whether crypto assets qualify as property under English law.
This position was further reinforced by judgement the High Court of England and Wales held that Bitcoin (BTC) constitutes property capable of being subject to injunctions and freezing orders12. The Court applied the four criteria set out in Lord Wilberforce's classic definition of property in National Provincial Bank v. Ainsworth13:
- Definable – Cryptocurrencies can be identified and separated from other assets.
- Identifiable by third parties – Ownership of crypto can be assigned and recognized.
- Capable of assumption by third parties – It can be transferred or traded.
- Having some degree of permanence – Crypto assets persist on the blockchain ledger.
Overall, the UK has firmly established cryptocurrencies as intangible property with enforceable rights, providing clarity on their legal status and ensuring that they are subject to the same protections as other forms of property. This recognition enhances the security and legitimacy of crypto-assets within the legal framework.
3.3. Singapore: Cryptocurrency as Property with Proprietary Rights
Singapore has recognized cryptocurrencies as property with enforceable rights through judicial interpretation. In ByBit Fintech Ltd v. Ho Kai Xin14, the Singapore High Court confirmed that crypto-assets are property capable of being held on trust, stating that "the holder of a crypto-asset has in principle an incorporeal right of property recognisable by the common law as a thing (or chose) in action and so enforceable in court."
The court reasoned that while crypto-assets do not fit neatly within traditional categories of property, they can be defined, identified, and valued, much like money, which derives its status from collective acceptance. Overall, Singapore recognition of cryptocurrencies as trustable property marks a significant step in granting them enforceable proprietary rights, aligning with global common law trends and strengthening legal safeguards for crypto-asset holders.
Further, in B2C2 Ltd v Quoine Pte Ltd [2019] 4 SLR 17, the Singapore International Commercial Court held (at [138]–[146]) that it was possible for cryptocurrencies to be held on trust, and that the defendant in that case did hold BTC on trust for the plaintiff. In so holding, the court reasoned that cryptocurrencies meet the four requirements set out in Ainsworth15 and "have the fundamental characteristic of intangible property as being an identifiable thing of value" (at [142]).
3.4. United States: Cryptocurrency as a Commodity and Property
The United States has taken a multi-agency approach in recognizing cryptocurrencies as property, a commodity, and a financial instrument. The Internal Revenue Service (IRS) officially classifies cryptocurrency as property for taxation purposes, treating it similar to stocks and real estate16. This classification means that capital gains tax applies to crypto transactions, reinforcing its status as an asset rather than currency.
From a regulatory perspective, different agencies have defined cryptocurrencies in various ways:
- The Commodity Futures Trading Commission (CFTC) classifies Bitcoin and other cryptocurrencies as commodities under the Commodity Exchange Act (CEA), 1936, allowing them to be regulated like Commodities.17
- The Securities and Exchange Commission (SEC) treats some cryptocurrencies as securities if they satisfy the Howey Test, established in SEC v. W. J. Howey Co18 .,. This test determines whether a transaction qualifies as an investment contract based on three key criteria: (1) an investment of money, (2) in a common enterprise, (3) with an expectation of profits derived primarily from the efforts of others. If a cryptocurrency meets these conditions, it falls under the SEC's regulatory jurisdiction, requiring compliance with securities laws, including registration and disclosure obligations.
The landmark case SEC v. Ripple Labs, Inc19. further clarified how crypto tokens can be classified as securities based on their use case. Overall, United States multi-agency framework provides a comprehensive legal structure that classifies cryptocurrencies based on their use—whether as property, commodities, or securities—ensuring regulatory clarity and robust investor protection.
4. Conclusion and Recommendations
The classification of cryptocurrency as property in India is currently implied but not explicitly defined under Indian statutes. An analysis of Indian legislation including the Transfer of Property Act, 1882, the Sale of Goods Act, 1930, and the Income Tax Act, 1961 reveals that cryptocurrency most likely fits the category of intangible movable property, akin to shares, software, or intellectual property.
Judicial and legislative trends globally particularly in the UK, Singapore, and the United States including other support the view that cryptocurrencies are property capable of ownership, transfer, and enforcement. These jurisdictions have taken a functional approach, focusing on whether crypto-assets meet the criteria for property rights: definability, assignability, permanence, and recognisability.
While Indian taxation law, via the Finance Act, 2022, implicitly treats cryptocurrencies as taxable assets, the lack of a unified legal framework continues to create ambiguity, especially in areas such as contract enforcement, asset recovery, inheritance, insolvency, and anti-money laundering regulations.
Recommendations
- Legislative Clarity: Enact a dedicated Crypto Assets Regulation or amend existing laws to expressly define cryptocurrency as intangible movable property.
- Judicial Interpretation: Courts should be encouraged to develop precedents addressing the proprietary status of cryptocurrencies, possibly adopting international reasoning such as the UK's four-fold test from National Provincial Bank v. Ainsworth20.
- Contractual Guidance: Legal professionals should include express terms in contracts dealing with cryptocurrency, recognizing it as intangible property and defining rights of ownership, transfer, and remedies in case of breach.
- Harmonization of Tax and Property Laws: Tax provisions under the Income Tax Act should be harmonized with definitions in property and commercial laws to create consistency in regulatory interpretation.
- Regulatory Sandboxes and Consultation Papers: Financial regulators should expand regulatory sandboxes and issue consultation papers to promote clarity and industry participation in developing crypto-specific regulations.
Footnotes
1. 3 (36) "movable property" shall mean property of every description, except immovable property;
2. Section 2(21) of BNS, 2023.
3. Section 22 - The words "movable property" are intended to include corporeal property of every description, except land and things attached to the earth or permanently fastened to anything which is attached to the earth.
4. AIR 1996 SC 2082
5. RBI in Internet and Mobile Association of India vs Reserve Bank of India (2020)10SC C 274 has taken a stand that cryptocurrencies or virtual currencies are not 'currency' under Foreign Exchange Management Act, 1999
6. UK Jurisdiction Taskforce. Legal Statement on Cryptoassets and Smart Contracts. LawTech Delivery Panel, November 2019. Available at: https://technation.io/wp-content/uploads/2019/11/6.6056_JO_Cryptocurrencies_Statement_FINAL_WEB_111119-1.pdf
7. [2019] EWHC 3556 (Comm)
8. "capital asset" means –
(a) property of any kind held by an
assessee, whether or not connected with his business or
profession;
(b) any securities held by a Foreign Institutional Investor
which has invested in such securities in accordance with the
regulations made under the Securities and Exchange Board of India
Act, 1992 (15 of 1992);
(c) any unit linked insurance policy to which exemption under
clause (10D) of section 10 does not apply on account of the
applicability of the fourth and fifth provisos thereof, but does
not include –
(i) any stock-in-trade [other than the securities referred to
in sub-clause (b)], consumable stores or raw materials held for the
purposes of his business or profession;
(ii) personal effects, that is to
say, movable property (including wearing apparel and furniture)
held for personal use by the assessee or any member of his family
dependent on him, but excludes –
(a) jewellery;
(b) archaeological collections;
(c) drawings;
(d) paintings;
(e) sculptures; or
(f) any work of art."
9. Raunaq Prakash Jain vs. Income Tax Officer, Ward-1 I.T.A. No. 01/Jodh/2024 (28.11.2024 - ITAT Jodhpur) : MANU/IO/0128/2024
10. AIR ONLINE 2020 SC 298
11. UK Jurisdiction Taskforce, supra note 2.
12. AA v Persons Unknown & Ors, Re Bitcoin [2019] EWHC 3556 (Comm)
13. UKHL 1, AC 1175, or 2 All ER 472
14. [2023] SGHC 199,
15. Supra at 13
16. Internal Revenue Service. (n.d.). Digital assets. U.S. Department of the Treasury, https://www.irs.gov/businesses/small-businesses-self-employed/digital-assets.
17. Commodity Futures Trading Commission. (2018). A CFTC primer on virtual currencies. U.S. Commodity Futures Trading Commission. https://www.cftc.gov/sites/default/files/2019-12/oceo_bitcoinbasics0218.pdf.
18. 328 U.S. 293 (1946)
19. No. 20-cv-10832 (S.D.N.Y. 2023).
20. Supra at 13
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