Bitcoin in back in the news and it has been recording hefty gains since the declaration of results of the recently-held US Presidential elections.
On November 12, a record-breaking rally in the original cryptocurrency led the digital asset past the coveted $89,000 mark, taking the overall value of the crypto market above its pandemic-era peak.
The largest cryptocurrency has gained around 32 percent since November 5 as traders predict a boom under the presidency of pro-crypto Donald Trump.
Trump has vowed friendlier crypto rules and his Republican Party is tightening its grip on Congress, boosting his odds of pushing through his agenda.
In this backdrop, many investors might be looking to diversify into bitcoins and other crypto assets. But before taking the plunge, it is important to do some research as digital assets are considered to be too risky.
For Indian investors, the biggest question on their minds is if bitcoin and other digital currencies are legal?
Yes, the digital assets are legal in India and can be bought from registered entities for investment-related purposes only.
How to buy Bitcoin in India?
Buying bitcoin is similar to purchasing stocks. Investors will have to select an app or an exchange as per their needs. Check the charges that app/exchange will levy on the profits and ensure they have proper security to protect the investments. It should also be enlisted with Financial Intelligence Unit.
Investors should also ensure that the app/exchange has diversified investment options and a proper customer care.
KYC and adding funds
Once you have zeroed in on a suitable app or an exchange, quickly sign up and complete the crucial KYC process. KYC is important for financial platforms to comply with regulatory laws in India. For KYC, you will have to submit your name, email ID, phone number and Aadhar details.
After the completion of the KYC process, investors will have to add funds on the platform by transferring capital to the wallet following which bitcoins can be purchased. Several platforms offer options to invest as low as Rs 100, while others allow a systematic investment plant. Depending on your needs, you can choose an appropriate plan.
There are several different cryptocurrency apps and exchanges in India. Some of them are: CoinDCX, WazirX, CoinSwitch, Mudrex, ZebPay, Bitbns, UnoCoin, BuyUcoin and Giottus among several others.
How to sell bitcoins?
You can sell your digital assets to the exchange for the running rate applicable. Investors can also sell it to their peers.
Tax policies for bitcoin profits
Government levies 30 percent flat tax on the profits generated after selling bitcoins and an additional 1 percent TDS on the transactions.
With Bloomberg inputs
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
