Is Bitcoin legal in India? Five Commonly Asked Questions

Bitcoin, the most widely used and first decentralized cryptocurrency in the world has slowly made an impact on the global market. Its notable network effect and high-end encryption layer have fueled its rapid growth in India’s thriving crypto market. It is now more accessible than ever, with more and more exchanges popping up each day. It boasts the largest developer ecosystem of any altcoin.

Although Bitcoin may seem like a promising technology, there are many things you need to know about its legal status in India. Your mind will be full of many questions. Let’s find the important ones.

Question 1: Can you buy bitcoin in India?

Bitcoin’s legal status in India is unclear at the moment. It is not officially prohibited or recognized as a legal money. While you can buy, sell and hold Bitcoin in India, there is no legislation to regulate its operation. This means that while buying bitcoin is legal, there is no regulatory framework in place to protect your investment.

To address any issues related to stocks or banking, you can contact the RBI Ombudsman. The same is not possible for crypto. It is therefore legal, but not regulated.

Question 2: Are bitcoin transactions subject to Indian taxation?

Bitcoin is not covered by the Indian Income Tax Act 1961. Therefore, there are no rules regarding cryptocurrency taxation. Because Bitcoin is still a new product for India, the RBI has not accepted it as a legal tender. However, this doesn’t mean that you won’t have to pay taxes on bitcoin profits.

All incomes, regardless of source, are subject to income tax. This includes your bitcoin profits. Capital gains from bitcoin, whether they are sold or held for investment, will be subject to the same tax as business income.

Question 3: How do I buy and invest Bitcoin in India?

The increasing number of Indian crypto exchanges has made it easier to buy, sell, and invest in Bitcoins. These exchange platforms make it much easier to trade Bitcoin and other crypto-assets.

First, open a trading account at the exchange to begin investing. You will need to:

Register on the exchange platform > Fill in your personal details > Verify email address and phone number.

Also Read: Bitcoin Casinos In Japan 2021

Also Read: How To Control Earnings With Investment In Crypto Currencies

After completing the registration, you will need to wait for verification. Once approved, you can transfer funds into your account to buy bitcoin. The registration process takes only 5-10 minutes and is instant.

Question 4: Can you cash out Bitcoin in India?

People are attracted to bitcoin because of its liquidity. You can easily convert bitcoin to cash. You can easily cash out bitcoins, whether you need it for an emergency or to get rid of investment because of bearish market conditions. Many popular Indian exchanges offer instant INR exchange and withdrawals.

Noting that you will need a KYC-verified account to cash out your cryptocurrency. These requisites must be met before you can cash out your cryptocurrency.

Question 5: What is the best Bitcoin wallet in India?

There are many bitcoin wallets that you can choose from:

  • Desktop wallets
  • Mobile wallets
  • l Paper wallets
  • Hardware wallets
  • l Exchange wallets

These wallets can be compared to online bank accounts and are responsible for safely storing bitcoins. However, wallets can have different features, such as accessibility and security.

Also Read: 6 Popular Uses Of Blockchain Technology In 2022

Conclusion

The Indian crypto market currently has approximately 15 million active investors. This is more than the 2.3 million UK investors. This shows a growing interest in Indian cryptocurrency investments. This can be taken to mean that Indian investors are not hindered by the lack of regulations.

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