The past few years have been nothing short of a roller coaster ride for crypto investors. The market has witnessed the rise and fall of various cryptocurrencies, and this trend is still apparent. Surprisingly the craze for crypto investment is gaining momentum, and more people are showing interest in starting their crypto trading journey. But what holds them back is the existing doubts. Since there is no regulation in place by the government, some people are doubtful whether it is even safe and legal to invest in cryptocurrency.
If you were planning to buy BTC in India, but the same doubts prevented you from investing, this guide is for you. After talking to various seasoned crypto investors and going through the statements released by the government, we’ve curated this guide to answer all your common questions. So make sure you read till the end.
Is Cryptocurrency a Legal Tender in India?
The simple answer is no. The Indian government has not accepted cryptocurrency as a legal tender yet. But it doesn’t mean the government has imposed a ban on cryptocurrency trading. It just doesn’t control it worldwide. Take the internet, for example. Everyone worldwide uses the internet, but no government owns it. Cryptocurrency is quite similar. Currently, the Indian government only accepts the native fiat currency, i.e., the Indian Rupee, as the official and legal tender throughout the country.
There are no laws that allow or prohibit people from indulging in cryptocurrency trading. So if your crypto trading journey goes south, you won’t have any authorized authority to turn to. You can consider cryptocurrency as any other asset class like real estate, gold, etc. However, always remember that the market’s nature is highly volatile and risky, so invest wisely.
Is it Illegal to Buy & Sell Cryptocurrencies in India?
Whether you want to buy Shiba Inu coin in India or any other cryptocurrency, you should know if investing in it is legal or not. Although RBI prohibited NBFCs, banks, and payment systems registered under it for facilitating transactions related to cryptocurrencies, this decision was taken back in March 2020 by the Supreme Court of India. The judgment allowed smooth facilitation of cryptocurrency transactions, paving the path for various crypto exchanges in the country. It is not illegal to buy and sell cryptocurrencies in India, but it is undoubtedly risky because of the high volatility involved.
Is it 100% Safe to Invest in Cryptocurrencies?
Nothing is 100% safe when it comes to the cryptocurrency market. Whether you pick the most popular cryptocurrency or the most promising one, there is no guarantee that you will earn profits from it. Investors with patience and a keen eye for identifying lucrative cryptocurrencies have made good profits. But those who invested in haste and under the influence of FOMO ended up losing a significant portion of their investment.
So whether cryptocurrency investment is safe will be determined by your selection of digital assets. To ensure you remain on the safer side, always conduct enough research to know where you’re planning to put your money. The more research you do, the better.
Tax Implications of Crypto Trading
Even though there is no definite framework or regulation around cryptocurrency, the government has made it mandatory for crypto traders to pay taxes. Whether you earn a profit or make a loss, you will be eligible to pay taxes on all transactions. If you plan to cash out your investment, then also tax will be applicable. Since the government views cryptocurrency trading as equal to gambling, it has levied a high tax rate on crypto transactions.
What Does the Future Hold for Crypto Traders in India?
Seeing the past trends of cryptocurrency growth in India and beyond, you can expect good things lined up for the future. The growth rate and popularity of cryptocurrency have made one thing very certain- cryptocurrency is here to stay. The government can certainly plan to impose some measures to regulate the entire space, but it isn’t going to ban cryptocurrency trading. So if you were holding yourself back from starting your cryptocurrency journey, now is the best time to do it.
On-board the Cryptocurrency Trading Journey
Everyone is looking for ways to make money from investment, and cryptocurrency has emerged as a lucrative asset class. Now that we’ve answered all the common questions that answer whether cryptocurrency investment is legal and safe in India or not, you can now begin your trading journey without any worry. However, always remember to invest with caution for the best returns.