India is relatively new to cryptocurrencies compared to the first world countries. It’s fair to say that crypto is in its infancy here. But the demand is growing exponentially and people, especially the younger generation, are getting more and more invested in this revolutionary form of finance.
If you live in India or one of its neighbouring countries and are wondering about what the crypto scene is like in this region, this post is for you. We’ll go over all the pertinent details you need to know. You’ll get answers to all the questions you’ve been eagerly thinking about. So without any further ado, let’s dive right in with a new article from HiRiBi!
Is Crypto Legal In India?
The first thing you should know is that cryptocurrency is legal in India.
But it is highly regulated by the authorities. In 2018, the Reserve Bank of India banned banks from dealing with crypto-related transactions. But in 2020, the Supreme Court struck down this ban. Currently, crypto is legal but the government is working on new regulations.
Tax Rules for Crypto
There are taxes on income from cryptocurrencies in India. Gains from crypto are taxed at 30%. There is no deduction allowed for any losses. Additionally, a 1% Tax Deducted at Source (TDS) must be paid on crypto transfers above a certain limit. So you can’t just take all your profits home tax-free.
Popular Crypto Exchanges in India
Some popular cryptocurrency exchanges in India are:
- WazirX: This is an Indian cryptocurrency exchange founded in 2018 that allows users to buy, sell, and trade digital currencies like Bitcoin, Ethereum, and Tether. Headquartered in Mumbai, WazirX has grown to become India’s largest crypto trading platform with over 12 million users. It was acquired by Binance in 2019 but continues to operate independently. WazirX has its native token, WRX, used to pay trading fees at discounted rates. The exchange is known for its easy user interface, fast trading engine, and 24/7 live chat support.
- CoinDCX: A leading Indian exchange with over 3 million users. It has low fees and allows instant deposits. Plus, it has a user-friendly interface, making it ideal for beginner traders.
- CoinSwitch Kuber: A simple app-based exchange for new crypto investors. It supports 100+ cryptocurrencies and offers instant trading.
Crypto Payment Option Expanding
More and more merchants in India are now accepting payment in crypto. Leading companies like Starbucks, AMC theatres and PVR cinemas plan to start accepting crypto payments soon.
Several travel companies like ClearTrip also allow crypto payments. This shows crypto adoption is increasing.
But Challenges Remain
However, there are still challenges for crypto. The government is planning strict regulations soon. A cryptocurrency bill is expected to come into parliament. If passed, it may ban private crypto and introduce an official digital currency by the RBI.
The crypto future remains uncertain in India. But it has gained significant momentum and is expected to grow if supported by regulations. Overall, crypto is legal but regulated strictly. Taxes are high at 30% but exchanges allow easy access. Adoption by merchants is also increasing steadily.
Crypto Investing Tips for Beginners
Here are some tips for beginners investing in crypto:
Start small
Invest only a small portion of your portfolio in crypto, less than 5% is recommended. The more you start to understand about crypto, the more you can invest in it. So while you should start small, there’s no reason you can’t invest a decent percentage of your investment portfolio in crypto after gaining a good amount of knowledge about the industry.
Use exchanges wisely
Open accounts only on trusted Indian exchanges that have good security. Otherwise, you risk getting scammed by thieves who are offering unbelievably high bonuses and discounts for all members of their exchanges. While this may sound like obvious advice to some of you, many people have already fallen victim to such simple scams. So stick to the trusted exchanges and you’ll be safe.
Stick to top coins
It’s best to invest in established coins like Bitcoin and Ethereum first. Going for the lesser-known coins in hopes of making it to the moon more often than not turns out disastrous. So if you’re a beginner, listen to the masses and go with a popular coin that’s not going to turn out to be what they call a “shit coin”.
Practice good security
Practising good security protocols will ensure your account doesn’t get hijacked. While security partly falls on the exchange system, it also partly falls on the user. Your job in keeping your crypto safe is to keep your wallet information to yourself. Never share it with anyone and use strong, unique passwords. Also, turn on 2-factor authentication for extra safety.
Learn continuously
Keep reading and learning about blockchain and different crypto projects. The more you learn about the industry, the higher your chances of identifying projects with great potential.
Outlook for the Future
The long-term outlook for crypto adoption in India seems positive. According to a report by Chainalysis, India ranks second in terms of global crypto adoption. About 100 million Indians are estimated to own cryptocurrencies.
While the percentage isn’t surprisingly high, the numbers sure are. Plus, with wider merchant acceptance and smarter regulations, crypto use will accelerate rapidly. We’re sure of this because younger generations are especially enthusiastic in India. So the adoption is guaranteed to grow in the coming years.
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