Cryptocurrency has rapidly gained popularity in recent years, with many people seeing it as a revolutionary form of currency that challenges traditional legal tenders. As countries worldwide grapple with the implications of this new technology, India finds itself at a crossroads. This article will explore the current state of cryptocurrency in India, examining the legal landscape, the history of cryptocurrency in the country, and the types of cryptocurrencies available to Indian investors.
Is Cryptocurrency Legal in India?
The legality of cryptocurrency in India has been a topic of debate, and at the time of writing, it remains in a state of flux. In contrast, private cryptocurrencies are not outright banned but are not recognized as legal tender. Cryptocurrencies cannot be used as an alternative to the Indian Rupee (INR) for payments or transactions. However, trading and investing in cryptocurrencies are allowed, and the government has been taking steps to draft regulations for the sector.
Crypto Regulation in India
India needs to adopt clear regulations surrounding cryptocurrency. It wasn’t until February 2021 that the government introduced the Official Digital Currency Bill in Parliament, which aims to create a legal framework for digital currencies in the country. The bill proposes the creation of a central bank digital currency(CBDC), the Digital Rupee, backed by the Reserve Bank of India (RBI).
In the meantime, the RBI and the Securities and Exchange Board of India (SEBI) are working together to create a regulatory framework for cryptocurrencies as an asset class. This includes defining norms for Initial Coin Offerings (ICOs), taxation, and Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements.
These regulations must be finalized before financial institutions in India can deal with cryptocurrency exchanges or provide services to customers trading in cryptocurrencies. However, individuals can still change and invest in cryptocurrencies through peer-to-peer (P2P) platforms and other international businesses.
How Is Crypto Taxed in India?
There is indeed a tax on cryptocurrencies in India. Before 2022, there wasn’t a specific income tax act for the crypto sector. In 2022, however, the central government of India officially recognized all digital coins and tokens as VDAs — Virtual Digital Assets — and implemented the applicable tax framework.
According to it, all profits from trading, selling, or spending any virtual asset are taxed at a 30% rate, and a 1% TDS tax is levied on the sale of crypto assets exceeding RS 50,000 (RS 10,000 in some instances) in a single financial year. Furthermore, if you receive income in crypto through activities like staking or mining, you may be subject to income tax at your tax rate.You can check out the other blog on how to prevent cryptocurrency from fraud and that is must to read for all cryptoholders.
Types of Cryptocurrencies That Are Available in India
Thousands of cryptocurrencies are available globally, and Indian investors have access to a wide range of options. Some of the most popular cryptocurrencies in India include:
Bitcoin (BTC) – The first and most well-known cryptocurrency, Bitcoin remains the world’s largest and most widely traded digital currency.
Ethereum (ETH) – Ethereum is a decentralized platform that enables developers to create and deploy smart contracts and decentralized applications (dApps) on its blockchain.
Ripple (XRP) – Ripple is a digital payment protocol facilitating fast and low-cost cross-border transactions between banks and other financial institutions.
Litecoin (LTC) – Litecoin is a peer-to-peer cryptocurrency that aims to provide faster and cheaper transactions than Bitcoin.
Cardano (ADA) – Cardano is a blockchain platform focusing on security and scalability; it supports smart contracts and dApps.
Funex (FUNEX)- Funex is a crypto coin which is created by Funex Club. It is a crypto token that is made on three blockchains- ERC20, TRC20, and BEP20. You can check out the website, it is the best multi-chain wallet for cryptocurrency to send, receive & store easily. They offer other services like metaverse, NFTs, and many more to explore.
Many other types of virtual currency, like Chainlink (LINK), Polkadot (DOT), and Uniswap (UNI), are also available for Indian investors through various cryptocurrency exchanges and P2P platforms.
Having cryptocurrency as an investment purpose is a great choice but many crypto holders have concerns about their storage and keeping them in a safe place. This is where Funex Wallet can assist them. It is the most secure custodial wallet in which crypto holders can store crypto coins or tokens. It is the best multi-crypto wallet which enables users to store more than 25 cryptocurrencies and they can also transact NFTs through this wallet. This crypto wallet offers the most secure system for crypto transactions.