Quick Answer: Polymarket is not explicitly banned in India, but it is not clearly legal either. Indian gambling law, FEMA, and the VDA tax framework all apply simultaneously. No regulator has issued a definitive ruling. Indian users face real legal and tax risk by accessing the platform.
Polymarket is not explicitly banned in India, but it is not clearly legal either. Indian law creates a multi-axis grey zone: gambling statutes, foreign exchange rules, and the new Virtual Digital Asset (VDA) framework all apply simultaneously. Whether Polymarket is legal in India depends on which legal lens you use, and right now, no regulator has issued a definitive ruling.
- No explicit ban: The Indian government has not named Polymarket in any prohibition list or circular.
- Gambling overlap: Prediction markets straddle skill-game and betting law, which varies state by state across India.
- VDA tax applies: Winnings settled in USDC likely qualify as VDA income, attracting 30% flat tax.
- FEMA exposure: Sending money abroad to fund a prediction market account could trigger Foreign Exchange Management Act scrutiny.
- No RBI or SEBI guidance yet: Neither regulator has classified prediction markets as a regulated product category.
What Polymarket Is and How Indians Access It
Polymarket is a decentralised prediction market built on the Polygon blockchain. Users buy outcome shares on real-world events, from election results to crypto price targets, using USDC stablecoin. It is non-custodial, meaning there is no central company holding your funds the way WazirX or CoinDCX would.
Indians typically access Polymarket through a self-custody wallet like MetaMask, fund it with USDC bridged from a centralised exchange, and connect directly to the protocol. There is no Indian rupee on-ramp on Polymarket itself. That means any INR-to-USDC conversion happens on an Indian exchange first, creating a documented transaction trail that Indian tax authorities can see.
Polymarket’s own terms of service have, at various points, restricted users from the United States. India is not on its blocked-country list as of this writing, but the platform uses geolocation tools, and this can change without notice. Always check the current terms before depositing.
Is Polymarket Legal in India? Gambling Law vs VDA Law
The Gambling Law Angle
India’s central gambling framework is the Public Gambling Act of 1867, which predates the internet by over a century. It bans games of chance but carves out games of mere skill. States have built their own rules on top of this. States like Goa and Sikkim permit licensed betting; others like Andhra Pradesh and Telangana have banned online games involving real money stakes entirely.
Prediction markets occupy an awkward middle ground. The Supreme Court’s 1957 ruling in State of Bombay v. RMD Chamarbaugwala established that skill-dominant activities are not gambling. Whether predicting an election outcome counts as skill or chance is genuinely unsettled. The Bombay High Court’s 2019 ruling in Gurdeep Singh Sachar v. Union of India held that fantasy sports involve substantial skill, but no court has applied that logic to crypto-settled prediction markets specifically.
The VDA Law Angle
The Finance Act 2022 defined Virtual Digital Assets and brought them under a specific tax regime, introducing a flat 30% tax rate on VDA income effective from April 1, 2022 (Source: Ministry of Finance, Budget 2022-23). USDC, the token Polymarket uses for settlement, qualifies as a VDA under India’s Income Tax Act. That means any profit you make on Polymarket, when you eventually convert USDC back to INR, is likely taxable under the VDA framework. You can read more about whether crypto is legal in India in 2026 for the broader regulatory picture.
The VDA framework also brings FEMA into play. Transferring funds abroad for investment in a foreign-domiciled platform could require compliance with the Liberalised Remittance Scheme (LRS). The Reserve Bank of India sets the LRS annual limit at USD 250,000 per resident individual per financial year (Source: RBI Master Direction on LRS, updated 2023). Whether a prediction market qualifies as an approved purpose under LRS has not been tested in any Indian court or regulatory proceeding.
Tax on Polymarket Winnings: 30% VDA or Other Income?
This is where Indian users face real ambiguity. There are at least two possible tax treatments, and the right one depends on how authorities ultimately classify prediction market income.
| Classification | Tax Rate | Loss Set-Off Allowed? | TDS Applicable? |
|---|---|---|---|
| VDA (crypto asset income) | 30% flat + 4% cess | No | 1% on transfers above threshold |
| Winnings from gambling/betting | 30% flat under Section 115BB | No | 30% TDS above Rs 10,000 |
| Income from other sources (skill game) | Slab rate (up to 30%) | Yes, limited | Varies |
The most conservative and defensible position right now is to treat Polymarket winnings India tax as VDA income, since USDC is the settlement token. That means 30% tax with no ability to offset losses from one market against gains in another. For a detailed breakdown of how VDA tax works, see our guide on crypto tax in India.
If authorities later classify prediction markets as gambling, Section 115BB applies, which is also 30%, but TDS kicks in at 30% above Rs 10,000 rather than the 1% VDA TDS threshold. Either way, you are looking at a heavy tax hit with zero loss relief. Keep records of every USDC deposit, withdrawal, and outcome settlement.
Practical Risks for Indian Users
Regulatory Risk
India has a track record of sudden regulatory shifts in crypto. The 2018 RBI circular that effectively banned crypto banking was reversed by the Supreme Court in 2020, but the episode showed how quickly the ground can shift. Prediction markets, sitting at the intersection of gambling and crypto, are arguably more exposed than straightforward crypto trading. Our analysis of what happens if India bans crypto covers the broader scenario.
Banking and Payment Risk
Indian banks have a long history of flagging or blocking crypto-related transactions. If you are converting INR to USDC on an Indian exchange and then moving funds to a prediction market, your bank may flag the outward transfer. There is no guarantee your account will not be temporarily frozen pending clarification.
FATF and Compliance Trails
India is a FATF member and has committed to implementing the Travel Rule for VDA transfers. As compliance tightens, on-chain transfers from Indian exchange wallets to DeFi protocols like Polymarket will become easier to trace. The FATF Travel Rule has direct implications for how Indian VDA service providers report your transactions. Do not assume DeFi means invisible.
Platform Risk
Polymarket is a US-founded protocol that settled a case with the US Commodity Futures Trading Commission (CFTC) in 2022 for operating an unregistered facility, paying a USD 1.4 million penalty (Source: CFTC Order, January 2022). That is a real compliance signal. It does not make the platform illegal for Indian users, but it does show regulators globally are watching prediction markets closely.
According to Dune Analytics data published in November 2024, Polymarket processed over USD 3.5 billion in cumulative prediction volume during the 2024 US election cycle (Source: Dune Analytics, Polymarket dashboard, November 2024). That scale attracts regulatory attention. Indian users should factor in the possibility that access could be restricted at any point, either by Polymarket itself or by Indian authorities.
Frequently Asked Questions
Is Polymarket legal in India?
There is no explicit ban, but there is no clear legal permission either. Indian gambling law, FEMA, and the VDA framework all create overlapping obligations. Accessing Polymarket sits in a grey zone, and the legal risk is real even if enforcement action against individual users has not been reported publicly. Treat it as an unregulated, high-risk activity.
Is using Polymarket treated as gambling in India?
It could be, depending on which state you are in and how a court interprets the skill-vs-chance question. Prediction markets have not been tested in Indian courts specifically. Some states have sweeping online gaming bans that could cover Polymarket. Until there is a judicial or legislative ruling, the gambling classification remains an open legal risk.
How are Polymarket winnings taxed in India?
The safest tax treatment is to report USDC winnings as VDA income at 30% flat rate plus 4% cess, with no loss set-off. If authorities reclassify prediction market income as gambling winnings under Section 115BB, the rate is still 30% but TDS rules differ. Either way, document every transaction and consult a tax professional with crypto experience.
Can Indian banks block Polymarket deposits?
Yes, they can. Indian banks have blocked crypto-related outward remittances before without formal regulatory instruction. If your bank flags a transfer to a crypto exchange that is subsequently moved to a prediction market protocol, your account could face temporary restrictions. There is no legal protection against this under current rules.
Is Polymarket’s USDC settlement a VDA transaction in India?
Almost certainly yes. USDC is a stablecoin and falls within India’s definition of a Virtual Digital Asset under the Finance Act 2022. Any transfer, receipt, or conversion of USDC is a VDA transaction for Indian tax purposes. The 30% VDA tax rate and 1% TDS rules apply when you move USDC back into INR on an Indian exchange.
What to do next: If you are using or considering Polymarket, get your tax records in order from day one. Use an Indian exchange that issues proper transaction history for your USDC conversions. Talk to a CA who understands VDA taxation. Stay updated on regulatory changes, because this legal landscape is moving.
This is not financial advice. Data as of July 2026. Regulatory and tax positions described here reflect the current grey-zone status and may change without notice. Always consult a qualified legal and tax professional before using unregulated platforms. Last updated: July 2026. Reviewed by the CryptoWire editorial team.
