Is Bitcoin legal and taxable in India – Here is all you need to know!

In the current finance market in India, cryptocurrency like Bitcoin may be beyond the purview of legalities and taxations, but the scenario might change with Bitcoin slowly and steadily influencing Indian traders. With rising popularity and promised earnings, Crypto trading in Kolkata is thriving, as new cryptocurrencies are being introduced daily.

Can Bitcoin become legal and come under tax regulations?

Bitcoin have caught the fancy of the Indian crypto traders and there has been and a lot of confusion with the legal status of Bitcoin in India. However, the government has earlier proposed a bill to impose ban on trading Bitcoin in India. But, as per a Top crypto development company, there has been no further development regarding this matter. As per the Indian Tax Act, cryptocurrencies are not mentioned in any form and no rules have been implemented as well.

As of now, there are no specific rules on how to govern cryptocurrencies and taxed in India because the Reserve Bank of India (RBI) has not yet granted Bitcoin a legal status in the country. Not being governed does not mean that traders can get away without paying taxes on the profits generated. Incomes generated from Bitcoin sales in Indian can be taxed as business income on frequent trading of the asset and if held for investment purposes as well.

Supreme court’s judgement on Bitcoin trading –

After the prohibition of crypto transactions imposed by RBI in 2018 on the banks and Banking Financial companies (NBFCs), financial transactions of Bitcoin trading or other cryptocurrencies was banned. But the ban was flattened by the Supreme Court of India, which has facilitated new ways for trading cryptocurrencies in India. This has further opened new venues for several cryptocurrency exchanges in India. Amidst the confusion regarding the legalities of Bitcoin India, the main thing is that there is no set guidelines or regulations in the country.

Can the lack of regulations on Bitcoin effect trades in India?

As depicted by a Top crypto development company, there is no legislature controlling Bitcoin trades in India. However, this doesn’t mean that trading in Bitcoin or other cryptocurrencies is totally illegal in the country. But the thing is that with the absence of robust regulatory framework, Bitcoin owners may not be able to enjoy the perks and the same security level as offered with the centralized counterparts or traditional financial assets.

As of now, the good thing about Bitcoin is that it is high on liquidity, which has helped in attracting many traders in India. Lack of regulation might not affect Bitcoin trades in India, as more and more people are showing interest in converting their Bitcoin to cash while exiting their investments. Citing the current scenario trading in Bitcoins in India is best done through a reputable cryptocurrency exchange. Currently, a KYC-verified account is the only thing required to trade and to exit your Bitcoin cash in India.

As of now, lack of legality and regulatory clarity for Bitcoins has not prevented Indians from trading the digital asset on the cryptocurrency exchanges. However, there are higher chances that Cryptocurrency trading in India will be legalized and taxed as its centralized counterparts. But nothing concrete can be predicted about Bitcoin’s future in the country.