Considering the rapidly growing size of crypto community in the country, it is becoming obvious that the Government is taking a cautious approach towards private virtual currencies. On the 15th of March this year (2021) India proposed a ban on Crypto.
Cryptocurrencies are not illegal in India. So if you want to buy, let’s say Bitcoins, you can do so and start trading in it. However, India does not have a regulatory framework to govern cryptocurrencies as of now. On the 15th of March this year (2021) India proposed a ban on Crypto. This ban didn’t pass the parliament, but it was to be one of the world’s strictest policies against cryptocurrencies, would criminalise possession, issuance, mining, trading and transferring crypto-assets, said the official, who has direct knowledge of the plan. A government panel in 2019 recommended jail of up to 10 years on people who mine, generate, hold, sell, transfer, dispose of, issue or deal in cryptocurrencies.
Taxes and Regulation
Cryptocurrency transactions are taxable in India in cases where the person earning such gains is an Indian tax resident or where the crypto is said to be domiciled in India. The Indian income tax law is still unclear regarding the tax impact on the gains earned from cryptocurrencies. It is worthwhile to note that India’s tax authorities have not yet categorized returns from cryptocurrencies under any specific bracket and there have been no judicial precedents in this regard. The Indian government may levy the 18% Goods and Services Tax (GST) on transactions on foreign cryptocurrency exchanges in order to level the playing field with domestic ones, according to reports in July
Once a trading platform has been identified, an investor has to upload all the required documents online on the exchange to complete the KYC (know your customer) process. Payment is available via PayPal and credit cards.
The Indian government does not require individual to report theirs cryptocurrency transactions except in two circumstances; 1. Reporting of any income or profits from cryptocurrency in the Income Tax returns. 2. As required by the CA Amendment.