Is Trust Wallet Legal in India?

Short answer: Yes, using Trust Wallet is legal in India. There is no Indian law that bans self-custody crypto wallet apps.

Here is what most users want to know upfront:

• Legal status: Using a non-custodial wallet like Trust Wallet is allowed.
• FIU registration: FIU rules apply to exchanges and VDA service providers, not wallet software itself.
• Tax: 30% tax on VDA transfer income and 1% TDS can apply under Indian tax law.
• Withdrawal reality: Trust Wallet cannot send INR directly to your bank. You need an exchange off-ramp.

Last updated: December 2025

Quick answers

Is Trust Wallet legal to use?
Yes. Using a self-custody crypto wallet app is not illegal by default in India.

Is Trust Wallet FIU-registered?
This question is often misplaced. FIU registration is meant for VDA service providers, not wallet software.

Does the wallet require KYC?
The wallet app itself does not. Third-party buy or sell features may.

Is Trust Wallet taxable?
Holding crypto is not taxed. Selling, swapping, or spending usually is.

What is Trust Wallet (and what it isn’t)

Understanding what Trust Wallet actually does is key to understanding its legal position in India.

Non-custodial wallet (self-custody)

It is a non-custodial crypto wallet. That means:

• You control your private keys and recovery phrase
• It does not hold your crypto
• It cannot freeze, reverse, or access your funds

In legal terms, Trust Wallet is software, not a financial intermediary. This distinction matters under Indian compliance rules.

Trust Wallet app vs Trust Wallet Token (TWT)

Many users confuse the wallet with the token.

• Trust Wallet is a mobile wallet application
• Trust Wallet Token (TWT) is a separate crypto asset used for governance and discounts

Owning or using the wallet does not mean you are buying or holding TWT. Their legal and tax treatment can differ.

ALSO READ: Understanding Custodial and Non-Custodial Wallets

Is Trust Wallet FIU-registered in India?

This is the most searched and misunderstood question around this wallet in India.

What “FIU registration” actually applies to

Under India’s Prevention of Money Laundering Act and FIU-IND guidelines, reporting entity obligations apply to VDA service providers, such as entities that:

• Exchange crypto to fiat or fiat to crypto
• Exchange one crypto for another as a service
• Transfer crypto on behalf of users
• Safeguard or administer crypto assets or private keys

These obligations are designed for exchanges, custodians, brokers, and on-ramps, not for wallet software used for self-custody.

Where Trust Wallet fits

Trust Wallet fits into the ecosystem as:

• A self-custody wallet application
• Software that lets users hold and interact with blockchains directly

Because it does not custody assets or execute trades as a reporting intermediary, FIU registration is generally not applicable to the wallet app itself.

However, there is an important nuance.

If the wallet surfaces third-party services inside the app, such as:

• Crypto purchases
• Fiat on-ramps
• Swaps are routed through external providers

Then compliance, including FIU registration and KYC, depends on the third-party provider, not on the wallet.

How to verify FIU-registered status – a practical checklist

To stay compliant in India, focus on this instead:

• Check whether the exchange or off-ramp you use is FIU-registered
• Assume that the wallet software itself is not the reporting entity
• Expect KYC and reporting when converting crypto to INR

Do not assume legality or compliance based only on the wallet you use.

Is Trust Wallet taxable in India?

The wallet’s usage itself is not taxed. Crypto transactions are.

What the 30% tax is

Section 115BBH of the Income Tax Act imposes a 30% tax on income from the transfer of Virtual Digital Assets (VDAs).

Key points:

• No set-off of losses against other income
• No deduction of expenses except acquisition cost
• Applies regardless of where the wallet is located

What the 1% TDS is

Section 194S provides for 1% TDS on consideration paid for the transfer of a VDA.

In practice:

• Exchanges often deduct TDS automatically
• Peer-to-peer or self-custody flows can still attract TDS obligations
• Responsibility can vary based on who pays whom

Common Trust Wallet actions that can trigger tax

Using the wallet does not automatically mean tax. These actions often do:

• Selling crypto for INR
• Swapping Token A to Token B
• Spending crypto for goods or services
• Receiving airdrops or rewards

Airdrops and rewards are especially complex and should be discussed with a qualified tax professional.

This article is informational only and not tax advice.

Does Trust Wallet require KYC?

The answer depends on what you are doing inside the app.

• The wallet itself is non-custodial and does not require KYC
• Creating a wallet does not require identity verification
• You control the keys and recovery phrase

However:

• Buying crypto via third-party on-ramps inside the app may require KYC
• Selling crypto or converting to INR will almost always require KYC with the provider

The wallet and the service provider are not the same entity.

How to withdraw from Trust Wallet in India (Bank or UPI)

This is one of the most common questions.

The wallet cannot send INR directly to your bank account.

Step-by-Step Withdrawal Process

1. Send crypto from Trust Wallet to an exchange deposit address
2. Ensure the correct blockchain network is selected
3. Sell crypto for INR on the exchange
4. Withdraw INR to your linked bank account or UPI

Important warnings

• Sending on the wrong network can permanently lose funds
• Exchanges may have minimum deposit and withdrawal limits
• KYC and transaction reporting happen at the exchange level
• Fees and price slippage can apply

Always test with a small amount first.

Is Trust Wallet safe or not?

It can be safe, but only if you understand self-custody risk.

What it does well

• You control your assets
• No central point of failure
• No account freezes by the wallet provider

What it is not responsible for

• Lost recovery phrases
• Phishing attacks
• Sending funds to the wrong addresses
• Fake apps or malicious links

Basic security checklist

• Store your recovery phrase offline
• Never share your seed phrase
• Download apps only from official app stores
• Beware of fake support messages and airdrops

Self-custody gives freedom, but it also gives full responsibility.

Conclusion

Trust Wallet is legal to use in India because it is a non-custodial wallet application, not a financial intermediary. FIU registration rules primarily target exchanges and VDA service providers, not self-custody software. Tax obligations arise from how you use crypto, not from holding it in a wallet. 

If you are navigating crypto wallets, taxes, and compliance in India, take time to educate yourself before transacting. Understanding the rules today can save you costly mistakes later. Discover more about the crypto ecosystem with Mudrex Learn or visit the official Mudrex YouTube channel for video guides.

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