Cryptocurrency regulations and Policies in India | Indian crypto law (2024)

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Cryptocurrency regulations and Policies in India | Indian crypto law? ›

The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 was introduced in the Lok Sabha. The bill seeks to create a favorable framework for the creation of digital currency that will be issued by the Reserve Bank Of India (RBI). Enjoy zero crypto deposit fees and industry's best fee rates.

No Legal Tender: Cryptocurrencies, including Bitcoin, are not recognized as legal tender in India. The Reserve Bank of India (RBI), the country's central bank, has clarified that virtual currencies do not have any official backing and are not regulated by any governmental authority.

How Is Cryptocurrency Taxed In India? In India, cryptocurrencies are classified as virtual digital assets and are subject to taxation. Gains made from trading cryptocurrencies are taxed at a rate of 30% (plus 4% cess) according to Section 115BBH.

Global Cryptos Face the Axe

Cryptocurrency exchanges like Binance, Kraken, Kucoin and others were banned in India by the FIU. The Director FIU IND wrote to the Secretary of Meity to block these exchanges as they were illegally operating without following the provisions of the PML Act in India.

However, in March 2020, the Supreme Court of India lifted the RBI's ban, deeming it unconstitutional. Since then, there has been no specific law that bans the possession or use of cryptocurrencies in India.

30% tax on Crypto in India income for FY 2022-23: 30% of ₹1 lakh = ₹30,000 (plus surcharge and cess). Selling: A 30% tax is payable on selling any crypto asset with a profit margin. Selling: A 30% crypto tax is levied when trading crypto. Exchanging: A similar 30% tax is also applied on such occasions.

Unregulated Market: The Indian crypto market itself is largely unregulated. While you can buy and sell cryptocurrencies on exchanges, there are no specific laws governing their use as a form of payment. Currently, there's no specific legislation governing cryptocurrency use or trading in India.

How do I avoid income tax on cryptocurrency? Capital gain on cryptocurrency is accrued only when they are actually sold and realised. Thus as long as you don't sell the cryptocurrency against another crypto no tax implication. This includes transfer from one wallet to another where no tax will be levied.

What are the problems with cryptocurrency in India? ›

Cryptocurrency in India offers financial inclusion, protection against inflation, remittance benefits, new investment avenues, fast transactions, and decentralization. However, it faces regulatory challenges, volatility, fraud risk, power consumption, and impact on traditional banking.

This development comes after the crypto exchange faced regulatory scrutiny by policy makers in India as well as the US. As per the email sent by the crypto exchange, Coinbase would be discontinuing services in India after September 25. Customers have been advised to withdraw their funds from their accounts.

Currently banned by the Indian government, crypto exchange Binance has reportedly received approval from the Financial Intelligence Unit (FIU) of the finance ministry to operate as a virtual asset service provider (VASP). As per an ET report, the unit also approved a similar application from Kucoin.

The Financial Conduct Authority (FCA) under the currency system regulates licensing to authorized businesses related to cryptocurrency including exchanges. They have a firm set of rules, and the ones that are seeking the license have to strictly follow them.

Cryptocurrency is not legal tender in India but legal to invest. To convert to cash: broker exchanges, crypto debit cards, peer-to-peer exchanges. Fees apply: Exchange fees, network fees. Tax on profit after 36 months.

First off, owning and trading Bitcoin (and other cryptocurrencies) is legal in India. The Reserve Bank of India (RBI) classifies cryptocurrencies as "virtual digital assets" (VDAs). This indicates recognition for tax purposes, but they are not considered legal tender.

In conclusion, the best crypto exchanges in India include Mudrex, CoinDCX, CoinSwitch, WazirX, ZebPay, and BitBNS based on several factors like ease of use, security, fees, coin availability, and more. Each crypto exchange has its strengths and weaknesses, catering to various needs and preferences.

Steps To Buy Cryptocurrency In India

Step 1: Sign up on your desired crypto exchange platform. Step 2: Set up your account security by verifying your email address. Step 3: Complete the Know Your Customer (KYC) process. Step 4: Add funds to your crypto exchange wallet.

However, in India, cryptocurrencies operate in a regulatory grey area, with no central authority overseeing their use as a payment medium. While Pakistan remains unregulated in this aspect, India, in the central budget of 2022 announced a 30% tax on gains from cryptocurrencies and a 1% tax deducted at the source.