Understanding the Legal
Status of Cryptocurrencies in India
There is a lot of speculation about crypto regulations in India. Is buying and selling crypto in India illegal? Has the Indian government imposed a ban on it ? Do we have to pay taxes on it? If these questions click with your mind when you think of investing in cryptocurrency then we have got you covered here.
In this blog which has been articulated after thorough research, we have penned down important points which answer all the questions and make crypto trading easy for you.
The fintech space is steadily spreading its legs in India and over 10 million Indians have already invested more than $1 billion in cryptos and counting. With the rise in Bitcoin and other cryptocurrencies, the government stands on its regulations and legal status is still unclear.
Let’s take a look at the quick primer to have a crystal clear picture.
Government stand on crypto
After a lot of contemplation, the Indian government has finally taken a step forward in regulating digital currencies in the country. In a move to legalise it, the MCA (Ministry of Corporate Affairs) has made it mandatory for companies who trade in crypto, to show trading/investments in the annual financial statements. It is seen as a positive move towards crypto regulations and taxation rules to be in line, and is expected to be the centre's next move. Further, the centre has assured investors that there won’t be a ban on digital currencies and they are in the process of formulating its law and regulations.
Is cryptocurrency taxable?
Yes, if the person is an Indian tax resident then there will be a tax levied on each transaction.
Is buying & selling crypto illegal?
No, crypto is not illegal. You can invest in it without the fear of any illegal action. There is no such law that prohibits trading crypto. Just like gold, commodities or real estate, crypto is like any other asset. There is no law on buying or selling gold or real estate properties and similarly, there is no law that prevents you from buying or selling cryptocurrencies.
Is crypto a safe investment
Yes, it is absolutely safe to invest in cryptocurrencies. However, just like any other investment such as mutual funds or stocks, crypto is also subject to underlying market risk. Hence, it is advised to conduct diligent research before you buy digital currency.
All in all, the law and regulations of cryptocurrencies in India are unclear. According to the present scenario revolving around cryptocurrencies, there is a lack of clarity. However, there are positive signs that the government is in the process of legalising it in the coming days. According to FM, Nirmala Sitaraman “government cannot shut an eye on the future technologies and a decision has to be thought through”.
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