Bitcoin's price surged after the US election, impacting the global crypto market, including India. While crypto trading is legal in India, it's subject to a 30% tax and a 1% TDS on transactions exceeding Rs 50,000.
With a record-breaking rise that reached almost $90,000 after Donald Trump won the US presidential election, Bitcoin has once again made headlines. This spike is a part of a larger upward trend in the cryptocurrency market and marks a gain of more than 25% since the election results were announced.
Trump's campaign pledges to promote digital assets and turn the US into a "crypto capital," creating an atmosphere that would attract investment and provide more transparent regulatory frameworks, are the source of the confidence. In India, where the cryptocurrency industry has remained active despite stringent restrictions and tax ramifications, this event has spurred increased interest in cryptocurrency trading worldwide.
Question: Is it legal to trade cryptocurrencies in India?
Answer: It is legal to trade cryptocurrencies in India. In 2020, the Reserve Bank of India's banking prohibition on cryptocurrencies was overturned by the Supreme Court, enabling trade to restart under controlled conditions. The government acknowledges cryptocurrencies as Virtual Digital Assets (VDAs) that are subject to particular taxation laws, even if there isn't a full crypto policy.
Question: What taxes are imposed in India on earnings from cryptocurrencies?
Answer: Gains from cryptocurrency trading are subject to a flat 30% tax. Furthermore, every transaction over ₹50,000 (or ₹10,000 for certain groups) is subject to a 1% TDS deduction. This TDS can be submitted for returns during Income Tax Return (ITR) filings and is applicable regardless of whether a profit is generated on the transaction.
Question: What is the application of the 1% TDS on cryptocurrency transactions?
Answer: The 1% TDS is applied to all transactions that exceed the designated limitations and is subtracted from the whole selling value, not just the profit. For instance, Rs 1,000 will be deducted as TDS if you sell cryptocurrency for Rs 1 lakh.
Question: What procedures should I adhere to in order to begin trading cryptocurrencies in India?
Answer: Select a platform: Choose an exchange that is registered.
KYC adherence: finalize the Know Your Customer (KYC) process.
Put money down: Use approved ways, such as bank transfers, to send money.
Trade and safely store: Keep your valuables in safe wallets and execute your deals.
Question: What dangers should I be mindful of when trading cryptocurrencies?
Answer: Trading cryptocurrencies is quite erratic. Digital assets are vulnerable to fraud and hacking, and prices can fluctuate significantly in a short amount of time. Furthermore, market dynamics may be impacted by regulatory changes, so it's important to be aware and vigilant.
Question: How can I take my cryptocurrency trading gains out?
Answer: To withdraw, make sure the TDS deduction is recorded when you sell your assets on an exchange and deposit the money into your bank account. When making withdrawals, adherence to tax laws is crucial.
subscribe to Asianet Newsable WhatsApp channel by clicking here. For more reliable and latest news
subscribe to Asianet Newsable Telegram channel by clicking here.