News By/Courtesy: Aakash Raj | 15 Jan 2021 16:20pm IST

HIGHLIGHTS

  • Fall in bitcoin price
  • Taxation on bitcoins
  • safety and privacy

If it is regulated or not. Clarity with respect to taxes or not. Big slices of bitcoin are taken by Indians, but how! On their website, the Cryptocurrency Exchanges that allow rupee-bitcoin transfers have seen a spike in the number of users. From April to December, Zebpay, one of the oldest exchanges with operations in India, grew its customer base by more than four times. Between March and December, as many as 1,40,298 new users registered on its website, while app downloads stood at 3,24,581 for the same period. In the last few days, Bitcoin rates could have changed by around 25%. Over the last few months, it had soared through the roof - from $6000-odd in April to $41,946.74 as of January 8, its all-time peak. On Monday, it reached a low of $30,549.60 for a day. Speak to believers in Bitcoin, and they say any dip is a chance to buy more. Yeah, but is it? Bitcoin is a virtual currency that, to allow transfers, does not have a sovereign authority but a decentralized peer-to-peer network. Yet Bitcoins are viewed as an investing path, rather than a payment processor. Being a finite commodity (it has been crafted by its founder Satoshi Nakamoto in a way that it will only have a limited supply of 21,000,000), it is regarded as digital gold by individuals worldwide. Countries such as Japan and the U.S., have allowed people to exchange goods and services in bitcoins. Bitcoin investors hope that, it will become an alternative to the US dollar and that the currency will find global adoption — steadily and gradually. In cryptocurrencies, this is what makes the long-term sentiment optimistic. Nevertheless, the unpredictable existence of the currency works against it this time. Bitcoins trade above Rs 25 lakh in the Indian currency. Interestingly, you can purchase units of Bitcoins (called satoshis) for as low as Rs 100 on Zebpay and many other exchanges. But is it smart to invest in Bitcoin? In India, Bitcoins are not regulated. There will be no dispute redress process where you can lodge a lawsuit if anything goes wrong. Taxation, though, could be close to that on gains taxed as capital gains if you are an investor in bitcoin. That ensures you can pay short-term capital gains as per the new tax slab if you redeem your savings within 3 years. If the redemption comes after 3 years, the redemption will be viewed with indexation as a long-term capital gain which will be taxed at 20%. In addition, North Block talks are proposing an 18% GST on bitcoin transactions. Research on levying GST on cryptocurrencies has been undertaken by the Central Economic Intelligence Bureau and has proposed to the finance ministry that bitcoin can be classified under the class of 'intangible asset' and that all transactions should be subject to GST. Your accounts with Bitcoins could be stolen. Although established exchanges placed checks and balances against it to secure the bitcoins, some investors hold their cryptocurrencies in cold wallets, i.e., printing them and physically holding them instead of having a hot wallet on the exchange. While all options are good, the cold wallet dilemma is that there is no way to retrieve the key if anything happens to the investor and no one else is aware of the password. The investments will be gone with the individual forever. 

 

This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.

Section Editor: Pushpit Singh | 15 Jan 2021 18:47pm IST


Tags : #BitcoinFever #Zebpay

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