Although it seems a good time to invest in Bitcoin, the right place to make this investment is more important.
Bitcoin appears to be a confounding concept for many people, but its increasing value over the last few months has brought everyone back to mind. Bitcoin’s value was up to $40,000 (roughly Rs. 29.2 lakhs).
However it remains unpredictable, and on January 11, Bitcoin slid 26 percent since March 2020 in its biggest plunge. Although Bitcoin can seem like a big investment, it is important to do your homework before you plunge. Experienced investors who know what they do won’t have to be told, but it can be quite risky for beginners.
Also Read: Guide: How To Buy Bitcoin In India 2021?
You need to find the right spots for this investment and consider the legal and fiscal ramifications of investing in Bitcoin before you start to invest. We can’t provide you with legal advice, but here is what we learned to start you in Bitcoin.
How do I buy Bitcoins in India?
Bitcoin can be bought from many online exchanges, such as BuyUCoin, Coinshare, Unocoin, etc. Unocoin is an exchange located in India. You can purchase, sell and keep Bitcoins via online exchanges like these. You can also do Bitcoin trading person by person using LocalBitcoins—the transaction is secured by an escrow.
In general, it is best to use an exchange that also enables its users to delete their Bitcoins from their personal wallets for safekeeping — exchanges do not allow this.
It goes without saying, but let’s say it anyway: it’s crucial to use secure practices such as two-factor authentication and a strong and unique password when creating an online exchange account.
Most Indian exchanges are also needed by KYC (Know Your Customer). This requires the verification of your identity using your government-issued ID cards such as proof of your address, PAN card, and bank information.
You can buy Bitcoin using digital payment methods once you place an order. You can move money from your bank accounts with NEFT, RTGS, debit, or credit card. One Bitcoin is worth $35,563 (approximately Rs. 26 lakhs) today, but to launch your Bitcoin Investment, you don’t have to purchase a whole coin. By chipping as low as Rs. 500, you can launch your Bitcoin investment.
Is it legal in India to buy Bitcoins?
The RBI prohibited controlled organizations (e.g. banks) from dealing with Bitcoin in 2018. This threw the market into a jump. The Supreme Court also accepted this decision later in the year. However, the SC reversed the ban last year. Although carrying Bitcoin has never been made illegal, the SC decision makes it easier for businesses in this region to do business.
Online tax service Cleartax further noted that in places for dispute settlement which may occur when dealing with Bitcoins, there are no laws, regulations, or guidelines. This raises the risk factor when dealing with India’s cryptocurrency. It is nevertheless legal in India to buy and sell Bitcoin.
How will I make sure my Bitcoin is securely stored?
You have to make sure that you store it safely after buying Bitcoins. Usually, these wallets are kept in bitcoin wallets—which can be offline storage like a USB drive, called cold wallets, but you can also use online wallets, like PayPal, the most recently called hot wallets.
And Bitcoin wallets in the past had many hacks, but many people tend to maintain at least part of their cold wallet investment.
What taxes do I have to pay if I have Bitcoins?
The tax front for Bitcoin investment in India is still uncertain. According to CoinDesk, a digital news website for currency, India-based investors may soon have to pay income taxes on investments from Bitcoin.
With Bitcoins’ booming value, profits to sell Bitcoin is taxed at 30 percent on short-term investment cryptocurrency gains about 20 percent on long-term investment. However, when you sell the Bitcoin, you don’t have to pay money simply because its value has risen.
What’s Bitcoin, How to Invest?: An Indian Bitcoin Guide