The AO says crypto was not property at all before the 2022 amendments, so my gain cannot be a capital gain. Is there a High Court holding that crypto is property?
Yes, but from outside the tax jurisdiction. Hearing an application for interim protection in a WazirX dispute, the Madras High Court held that crypto currency is property — not tangible property and not currency, but property capable of being enjoyed, possessed in a beneficial form and held in trust. It is a civil ruling under the Arbitration and Conciliation Act, not a decision on the Income-tax Act, so it supports the characterisation argument without deciding any head of income.
Decided by the High Court (Madras High Court (original side) — N. Anand Venkatesh, J.) on 2025-10-25, reported as [2025] 179 taxmann.com 561 (Mad.)(HC); Original Application No. 194 of 2025. It bears on section 2(47A), section Arbitration and Conciliation Act s.9 of the Income Tax Act 1961, in Crypto & Virtual Digital Assets and Capital Gains matters.
The department's line in pre-regime years, and occasionally in s.69A additions, is that crypto is not an asset known to law, so the receipt is a residuary receipt rather than the consideration for transferring property. A High Court holding that crypto is property capable of ownership and of being held in trust closes that route, and it does so from a court of record rather than from commentary. It is a supporting authority, not the answer: the head of income still has to be argued on s.2(14) and s.2(47), and for years inside the regime s.115BBH answers the question anyway.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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The applicant invested Rs. 1,98,516 in January 2024 through a crypto trading platform operated by the first respondent and held 3,532.30 XRP coins, worth Rs. 9,55,148.20 as on 17 January 2025. On 18 July 2024 the platform suffered a cyber attack; the announced loss was about USD 230 million, and on the respondents' own narrative roughly 45 per cent of the platform's assets were siphoned off. The coins actually stolen were of a different class from those the applicant held. User accounts were frozen and a scheme was proposed under which the losses would be socialised across users, including users whose own holdings were unaffected; a modified scheme was approved by the Singapore High Court on 13 October 2025. The applicant, who operated the platform from her mobile phone at her ordinary residence in India and was frozen out of trading or liquidating, sought interim protection under s.9 of the Arbitration and Conciliation Act 1996 in aid of a Singapore-seated arbitration. Jurisdictional objections were taken and rejected, and the Court directed the first respondent to furnish a bank guarantee of Rs. 9,56,000 in her favour, renewed until the arbitration ends, or in the alternative to deposit that sum in escrow.
Crypto currency is property. It is not tangible property and it is not currency, but it is property capable of being enjoyed and possessed in a beneficial form, and capable of being held in trust. On that footing, and on a prima facie finding that the asset was held by the applicant in India through the platform, the application under s.9 was maintainable notwithstanding a foreign seat, and her holding was secured by a bank guarantee or escrow deposit pending the arbitration. Two things were not decided. The proposition that virtual digital assets held electronically are meant to be held in trust with a fiduciary duty owed to their owners is one the Court adopted by expressing complete agreement with a decision of the Bombay High Court, rather than one it worked out for itself. And whether one user's holding can be eroded to absorb another's loss was expressly left to the Arbitral Tribunal, as was the question whether the Singapore order binds the applicant; she was secured pending that adjudication rather than succeeding on it.
On jurisdiction the Court held that the proviso to s.2(2) of the Arbitration and Conciliation Act allows an Indian court to act under s.9 where a party is resident in India, that party's assets are in India and interim orders are needed to preserve them; the applicant had operated the platform from her phone at her ordinary residence, so prima facie the crypto was held by her in India through the platform. It then surveyed for itself what a crypto asset is. 'Currency' is a misnomer, because a currency is an official index of value whereas a crypto asset is worth only what a willing buyer and seller attribute to it. The coin resides where the blockchain is: the asset sits on the ledger and the keys sit in a wallet. The analogy with a dematerialised share was drawn and then rejected as inexact, because a share represents an equitable interest in a real corporation and can be proved in liquidation, and no such thing exists for crypto. The Court adopted the New Zealand decision in Ruscoe v. Cryptopia, which treats crypto as intangible property, more than mere information, definable through the public key with control supplied by the private key and by the generation of a fresh key on transfer, and capable of being held on trust. It then took the content of 'property' from two decisions of the Supreme Court - one holding that property signifies every possible interest a person can hold or enjoy, the other that it connotes everything which is the subject of ownership, corporeal or incorporeal, tangible or intangible - and held that, judged by those, crypto currency is property. The Income-tax Act appears once, at para 48, as a description: in the Indian regime crypto is treated as a virtual digital asset governed under s.2(47A), and is not treated as a speculative transaction because the user's investment is converted into crypto capable of being stored, traded and sold. The Court did not construe that provision or decide anything under the Act.
Judging from the above two decisions, there can be no doubt that "crypto currency" is a property. It is not a tangible property nor is it a currency. However, it is a property, which is capable of being enjoyed and possessed (in a beneficial form). It is capable of being held in trust.
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Handle my notice → Ask a CA on WhatsAppYes, but from outside the tax jurisdiction. Hearing an application for interim protection in a WazirX dispute, the Madras High Court held that crypto currency is property — not tangible property and not currency, but property capable of being enjoyed, possessed in a beneficial form and held in trust. It is a civil ruling under the Arbitration and Conciliation Act, not a decision on the Income-tax Act, so it supports the characterisation argument without deciding any head of income. This was decided by the High Court (Madras High Court (original side) — N. Anand Venkatesh, J.) and bears on section 2(47A), section Arbitration and Conciliation Act s.9 of the Income Tax Act 1961. It is reported as [2025] 179 taxmann.com 561 (Mad.)(HC); Original Application No. 194 of 2025. The department's line in pre-regime years, and occasionally in s.69A additions, is that crypto is not an asset known to law, so the receipt is a residuary receipt rather than the consideration for transferring property. A High Court holding that crypto is property capable of ownership and of being held in trust closes that route, and it does so from a court of record rather than from commentary. It is a supporting authority, not the answer: the head of income still has to be argued on s.2(14) and s.2(47), and for years inside the regime s.115BBH answers the question anyway. If it applies to you, the first step is this: Use it to answer the 'crypto is not property' assertion, and pair it with the Tribunal authority on s.2(14) rather than relying on it alone.
The applicant invested Rs. 1,98,516 in January 2024 through a crypto trading platform operated by the first respondent and held 3,532.30 XRP coins, worth Rs. 9,55,148.20 as on 17 January 2025. On 18 July 2024 the platform suffered a cyber attack; the announced loss was about USD 230 million, and on the respondents' own narrative roughly 45 per cent of the platform's assets were siphoned off. The coins actually stolen were of a different class from those the applicant held. User accounts were frozen and a scheme was proposed under which the losses would be socialised across users, including users whose own holdings were unaffected; a modified scheme was approved by the Singapore High Court on 13 October 2025. The applicant, who operated the platform from her mobile phone at her ordinary residence in India and was frozen out of trading or liquidating, sought interim protection under s.9 of the Arbitration and Conciliation Act 1996 in aid of a Singapore-seated arbitration. Jurisdictional objections were taken and rejected, and the Court directed the first respondent to furnish a bank guarantee of Rs. 9,56,000 in her favour, renewed until the arbitration ends, or in the alternative to deposit that sum in escrow. The matter was decided on 2025-10-25 by the High Court (Madras High Court (original side) — N. Anand Venkatesh, J.). On those facts the High Court held as follows. Crypto currency is property. It is not tangible property and it is not currency, but it is property capable of being enjoyed and possessed in a beneficial form, and capable of being held in trust. On that footing, and on a prima facie finding that the asset was held by the applicant in India through the platform, the application under s.9 was maintainable notwithstanding a foreign seat, and her holding was secured by a bank guarantee or escrow deposit pending the arbitration. Two things were not decided. The proposition that virtual digital assets held electronically are meant to be held in trust with a fiduciary duty owed to their owners is one the Court adopted by expressing complete agreement with a decision of the Bombay High Court, rather than one it worked out for itself. And whether one user's holding can be eroded to absorb another's loss was expressly left to the Arbitral Tribunal, as was the question whether the Singapore order binds the applicant; she was secured pending that adjudication rather than succeeding on it.
On jurisdiction the Court held that the proviso to s.2(2) of the Arbitration and Conciliation Act allows an Indian court to act under s.9 where a party is resident in India, that party's assets are in India and interim orders are needed to preserve them; the applicant had operated the platform from her phone at her ordinary residence, so prima facie the crypto was held by her in India through the platform. It then surveyed for itself what a crypto asset is. 'Currency' is a misnomer, because a currency is an official index of value whereas a crypto asset is worth only what a willing buyer and seller attribute to it. The coin resides where the blockchain is: the asset sits on the ledger and the keys sit in a wallet. The analogy with a dematerialised share was drawn and then rejected as inexact, because a share represents an equitable interest in a real corporation and can be proved in liquidation, and no such thing exists for crypto. The Court adopted the New Zealand decision in Ruscoe v. Cryptopia, which treats crypto as intangible property, more than mere information, definable through the public key with control supplied by the private key and by the generation of a fresh key on transfer, and capable of being held on trust. It then took the content of 'property' from two decisions of the Supreme Court - one holding that property signifies every possible interest a person can hold or enjoy, the other that it connotes everything which is the subject of ownership, corporeal or incorporeal, tangible or intangible - and held that, judged by those, crypto currency is property. The Income-tax Act appears once, at para 48, as a description: in the Indian regime crypto is treated as a virtual digital asset governed under s.2(47A), and is not treated as a speculative transaction because the user's investment is converted into crypto capable of being stored, traded and sold. The Court did not construe that provision or decide anything under the Act. In the words reproduced by the source cited on this page: "Judging from the above two decisions, there can be no doubt that "crypto currency" is a property. It is not a tangible property nor is it a currency. However, it is a property, which is capable of being enjoyed and possessed (in a beneficial form). It is capable of being held in trust."
It was decided by the High Court on 2025-10-25 and is reported as [2025] 179 taxmann.com 561 (Mad.)(HC); Original Application No. 194 of 2025. Binding within that High Court's jurisdiction. Persuasive elsewhere. A High Court decision binds the assessing officer, the Commissioner (Appeals) and the Income Tax Appellate Tribunal within that state, and is persuasive elsewhere. If your assessment is in a different jurisdiction, check whether your own High Court has taken the same view before relying on it. On section 2(47A), section Arbitration and Conciliation Act s.9, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It cuts both ways and is cited by both sides. Crypto currency is property. It is not tangible property and it is not currency, but it is property capable of being enjoyed and possessed in a beneficial form, and capable of being held in trust. On that footing, and on a prima facie finding that the asset was held by the applicant in India through the platform, the application under s.9 was maintainable notwithstanding a foreign seat, and her holding was secured by a bank guarantee or escrow deposit pending the arbitration. Two things were not decided. The proposition that virtual digital assets held electronically are meant to be held in trust with a fiduciary duty owed to their owners is one the Court adopted by expressing complete agreement with a decision of the Bombay High Court, rather than one it worked out for itself. And whether one user's holding can be eroded to absorb another's loss was expressly left to the Arbitral Tribunal, as was the question whether the Singapore order binds the applicant; she was secured pending that adjudication rather than succeeding on it. It arises in Crypto & Virtual Digital Assets and Capital Gains matters, on section 2(47A), section Arbitration and Conciliation Act s.9 of the Income Tax Act 1961, and was decided by Madras High Court (original side) — N. Anand Venkatesh, J.. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Tell the officer plainly what the decision is — an interim order in an arbitration application — so that the reliance cannot be attacked as overstated. Do not cite it for a year inside the virtual digital asset regime, where s.115BBH governs whether or not the asset is a capital asset. Where an exchange holds coins for you, note the trust finding as well: it bears on who owns the asset in a year in which the exchange, not you, controlled it.
Searched for later treatment; none was found. That is not the same as a source affirming it. The order runs to 68 numbered paragraphs and is reported at [2025] 179 taxmann.com 561 (Madras), Original Application No. 194 of 2025, 25 October 2025. Later treatment: none. No decision applying, following or affirming it is recorded, and nothing records it as stayed or as carried to a Division Bench. Absence of contrary authority is not good law, so the status stays unverified. The structural caveat governs how far it can be pushed in any event: this is an interim order under s.9 of the Arbitration and Conciliation Act in aid of a pending arbitration, the finding on where the asset is held is expressly prima facie, and the substantive questions — whether the Singapore order binds the applicant, and whether a security breach can erode the asset itself and be socialised across users — are reserved to the Arbitral Tribunal. Whether the definition of a virtual digital asset has moved since October 2025 is not established here, so check s.2(47A) as it stands for your year before carrying the characterisation into a tax argument. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
This is an interim order under s.9 of the Arbitration and Conciliation Act 1996 on the nature of a crypto holding, and it decides nothing under the Income-tax Act: no question under the Act was before the Court and the Revenue was not a party. The order was read in full and s.2(47A) appears in it exactly once, at para 48, as a description of how Indian law labels crypto; the Court did not construe that provision or any other provision of the Act, so the tax point in this order is one sentence long. Two limits on the holding are worth carrying. The finding that the asset was held by the applicant in India is expressly prima facie. And the fiduciary formulation - that virtual digital assets held electronically are meant to be held in trust, with a fiduciary duty owed to their owners - is not this Court's own: at para 59 it expressed complete agreement with a decision of the Bombay High Court of 7 October 2025 in a related matter, and adopted the proposition from there. The proposition that crypto is property, at para 47, is stated without qualification, but it sits inside an interim order. It says nothing about the head under which a crypto gain is taxable, nothing about cost of acquisition, and nothing about years governed by s.115BBH. It does not decide whether a loss on one wallet can be adjusted against a different crypto in a different wallet - the Court identified that as the moot question and left it to the Arbitral Tribunal - and it does not decide whether the foreign scheme binds the applicant. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
Crypto currency is property. It is not tangible property and it is not currency, but it is property capable of being enjoyed and possessed in a beneficial form, and capable of being held in trust. On that footing, and on a prima facie finding that the asset was held by the applicant in India through the platform, the application under s.9 was maintainable notwithstanding a foreign seat, and her holding was secured by a bank guarantee or escrow deposit pending the arbitration. Two things were not decided. The proposition that virtual digital assets held electronically are meant to be held in trust with a fiduciary duty owed to their owners is one the Court adopted by expressing complete agreement with a decision of the Bombay High Court, rather than one it worked out for itself. And whether one user's holding can be eroded to absorb another's loss was expressly left to the Arbitral Tribunal, as was the question whether the Singapore order binds the applicant; she was secured pending that adjudication rather than succeeding on it.
TaxSphere, “Rhutikumari v Zanmai Labs”, https://taxnotice.vittsphere.com/caselaw/case/rhutikumari-v-zanmai-labs-crypto-is-property/ (validity last checked 2026-08-23)
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