⚖️ Legal Compliance

Indian Compliance Requirements for Digital Businesses

Complete guide to RBI, SEBI, IT Act 2000, GST, and TDS compliance for websites and digital services operating in India. Stay legally protected and avoid penalties.

Free Compliance Check Consult Compliance Expert
85%
Indian Websites Non-Compliant
₹25L
Average Non-Compliance Penalty
15+
Key Regulations to Follow
1200+
Businesses Made Compliant

Key Indian Compliance Acts & Regulations

Understanding the legal framework that governs digital businesses in India

IT Act 2000 & Amendments

The Information Technology Act, 2000 is the primary law dealing with cybercrime and electronic commerce in India.

  • Section 43A: Data protection & compensation
  • Section 72: Breach of confidentiality
  • Section 66: Computer related offenses
  • Section 69: Interception & monitoring
  • IT Rules 2021: Significant social media

Penalties

Up to ₹5 crore compensation + imprisonment up to 3 years for serious offenses

RBI Regulations

Reserve Bank of India regulations for payment systems, fintech, and digital transactions in India.

  • Payment Aggregator Guidelines
  • Prepaid Payment Instruments (PPI)
  • KYC/AML Guidelines
  • Cross-border Payment Regulations
  • Storage of Payment System Data

Penalties

Up to ₹1 crore per violation + license cancellation for payment aggregators

SEBI Regulations

Securities and Exchange Board of India regulations for investment platforms, fintech, and financial services.

  • Investment Advisor Regulations
  • Research Analyst Regulations
  • Crowdfunding Guidelines
  • Digital Gold Regulations
  • Algorithmic Trading Guidelines

Penalties

Up to ₹25 crore or 3x unlawful gain, whichever is higher + license suspension

Essential Compliance Requirements

Mandatory legal requirements for all websites and digital businesses operating in India

Privacy Policy & Data Protection

Mandatory privacy policy requirements under IT Act and upcoming Data Protection Act

  • Clear data collection disclosure
  • Purpose limitation specification
  • Data sharing & third-party disclosure
  • User rights & grievance redressal
  • Data retention & deletion policy
  • Cross-border data transfer clauses

Legal Warning

Without proper privacy policy: Up to ₹5 crore penalty under IT Act Section 43A

Terms of Service & Legal Agreements

Comprehensive legal agreements protecting your business and user rights

  • User acceptance & eligibility criteria
  • Intellectual property rights
  • Limitation of liability clauses
  • Dispute resolution & jurisdiction
  • Termination & suspension terms
  • Governing law & venue specification

Compliance Note

Proper ToS can reduce legal liability by up to 80% in consumer disputes

Business-Specific Compliance Requirements

Additional regulations based on your business type and operations

  • Consumer Protection (E-commerce) Rules 2020
  • Legal Metrology (Packaged Commodities) Rules
  • GST Registration & E-way Bill Compliance
  • Payment Gateway & Aggregator Regulations
  • Product Liability & Warranty Compliance
  • Cross-border E-commerce Regulations
  • Returns & Refunds Policy Requirements
  • Country of Origin Labeling Rules

Indian Compliance Checklist

Step-by-step guide to achieving full compliance for your digital business

1

Legal Entity Registration

Register appropriate legal entity (Private Limited, LLP, OPC) with MCA. Obtain DIN, DSC, and Certificate of Incorporation.

Timeline: 7-15 days | Cost: ₹15,000 - ₹25,000

2

GST Registration & Compliance

Mandatory if turnover exceeds ₹20 lakhs (₹10 lakhs for special category states). Obtain GSTIN and comply with monthly/quarterly filings.

Threshold: ₹20 lakhs | Penalty: ₹10,000 per default

3

Website Legal Agreements

Implement Privacy Policy, Terms of Service, Refund Policy, Disclaimer, and other required legal agreements on your website.

Required: IT Act 2000 | Penalty: Up to ₹5 crore

4

Data Protection & Security

Implement SSL certificate, data encryption, secure payment gateway, and comply with data localization requirements if applicable.

Mandatory: RBI Guidelines | Security: ISO 27001 recommended

Compliance FAQs

Common questions about Indian compliance requirements answered by our legal experts

Is a Privacy Policy mandatory for websites in India?

Yes, absolutely mandatory. Under Section 43A of the Information Technology Act, 2000, any corporate entity handling sensitive personal data must have a privacy policy. The IT Rules 2011 further mandate specific disclosures including:

  • Clear disclosure of data collection practices
  • Purpose of data collection and usage
  • Disclosure of information sharing with third parties
  • Reasonable security practices and procedures
  • Grievance officer contact details

Penalty: Failure can result in compensation claims up to ₹5 crore under Section 43A.

What are the RBI compliance requirements for payment gateways?

RBI has specific guidelines for Payment Aggregators (PAs) and Payment Gateways (PGs):

  • Authorization: Must obtain authorization from RBI to operate as PA/PG
  • Net-worth: Minimum net-worth of ₹15 crore at time of application, ₹25 crore by March 31, 2023
  • Escrow Account: Mandatory maintenance of escrow account with scheduled commercial bank
  • KYC/AML: Strict adherence to KYC/AML/CFT guidelines
  • Data Localization: Storage of payment system data only in India
  • Security: Implementation of PCI-DSS and ISO 27001 standards

Non-compliance can lead to license cancellation and penalties up to ₹1 crore per violation.

When is GST registration required for online businesses?

GST registration is mandatory under the following conditions:

  • Threshold Limit: Annual turnover exceeds ₹20 lakhs (₹10 lakhs for North-Eastern and hill states)
  • Inter-state Supply: Any inter-state supply of goods or services (no threshold)
  • E-commerce Operators: All e-commerce operators must register irrespective of turnover
  • Casual Taxable Persons: Persons making taxable supply occasionally
  • Non-Resident Taxable Persons: Foreign entities supplying to India

Late Fees: ₹100 per day (₹50 CGST + ₹50 SGST) up to maximum ₹5,000. Interest at 18% p.a. on tax due.

Need Help with Indian Compliance?

Get expert consultation and ensure your business meets all Indian legal requirements. Avoid penalties and operate with confidence.

Call Compliance Expert Free Compliance Audit

Compliance Consultation: Mon-Sat 10 AM - 7 PM IST