Source: Inc42
Since Donald Trump returned to the US presidency, the blockchain and cryptocurrency markets have shown an increase in the market value of Bitcoin and other cryptocurrencies. Bitcoin is nearly $100,000. Bitcoin Crosses 95000 Marking A New Record High After Trumps Win. It is predicted that by the year-end, the value of Bitcoin may surpass even 100,000. Investors are optimistic after Trump’s election win stating that the environment has become crypto-friendly-the sector which has always faced unclear regulatory framework.
Where Does India Rank In The List Of Crypto Adoption?
According to the latest Chainalysis report, ‘Global Crypto Adoption Index 2023’, India ranks first amongst 154 countries in terms of adopting cryptocurrencies and letting the people of the country regulate their utilization in daily life. Since blockchain and cryptocurrency follow the decentralized path, the central monetary authorities are now forced to pay close attention towards the mining, buying, and selling of cryptocurrencies. In 2013, the Reserve Bank of India (RBI) alerted the people of India about the general, security and the frauds being associated with cryptocurrency utilization.
When The Supreme Court Deemed Cryptocurrency As Unconstitutional…
Source: Blockchain News
Two years later, the Supreme Court deemed the cryptocurrency use and the buying or selling processes to be unconstitutional. Later, the government of India decided to adopt a different approach and virtual currencies. The government of India, including the Reserve Bank and the Finance Ministry of India said that there should be no ban on virtual currencies and should be held into motion under the regulatory framework.
The Indian Government Finally Accepted The Existing Cryptocurrency Technologies in 2021
In the Lok Sabha, The Cryptocurrency Bill of 2021, was introduced setting a milestone as the first step to regulate the cryptocurrencies in the market or attempting to regulate it for ordinary people. There were set a few guidelines for creating the official digital currency from the Reserve Bank of India (RBI) and the Finance Ministry of India, supporting the use of cryptocurrency technologies while having a ban on all the blockchain and cryptocurrency being existed in other countries.
A report from Statista shows that the Indian cryptocurrency market is hopefully touching the value line of $222.70 million by 2023 marking a new record for Indian people. This also gave a prediction about the fact that cryptocurrencies will hopefully stay in Indian territory even if the technologies are not accepted yet. Blockchain and Web 3.0 are already being implemented across the industries in India setting a big next foundation after the foundation of Metaverse trend.
Is Bitcoin Legal In India? Has the Indian Government Accepted Bitcoin For Its Goods And Services?
Source: Ledger Insights
Although India is not a type of country where the phenomenon of cryptocurrency can be accepted without any major or strict regulation and rules, there are a few savvy businessmen who are accepting Bitcoin for their regulated sales of goods and services that they have dealt with.
Bitcoin, which has become a medium of payment in many countries outside India, has never been regulated, or authorized, and no rules were set by the central authority in India. Furthermore, there has been no decision concerning the rule-making policies in the central authority of India. Hence, Bitcoin utilization (mining, buying, selling) comes with its own risk for transactions.
On one hand, India has set no ban on Bitcoin. On the other hand, there is no background set for the Bitcoin regulation. We cannot say that Bitcoin is completely illegal in India. Later on 25th February 2019, the Supreme Court of India came up with cryptocurrency regulation policies. The matter was adjourned until its next hearing on 29th March 2019 and it was later rescheduled for hearing in the second week of July 2019.
The Finance Ministry of India pronounced or revealed that Bitcoin or other cryptocurrencies are not legal tender in a press conference. Instead of setting cryptocurrencies as a legal currency in India, the Finance Ministry of India pronounced that “it is an asset”.
Is There Any Tax Imposed On Blockchain And Cryptocurrency In India?
The Finance Act 2022 introduced Section 115BBH imposing tax or a particular fee on the income earned through Bitcoin trading. This section also includes the tax on the currency or profits earned through Virtual digital assets, and cryptocurrencies.
Union Budget 2022 has also clarified certain points. These points are described below–
The Indian government or the Finance Ministry of India has included crypto under “Virtual Digital Assets”. The income earned from the transfer of virtual digital assets such as crypto and NFTs will be taxed at 30%.
There will be a deduction on the cost of acquisition that a person reports from the transfer of digital assets.
No loss from the utilization of digital assets will be carried forward against any other income.
If you are gifting a digital asset to any other relative or third-party person, it will attract a tax in the receiver’s hand.
There will be an imposition of 1% TDS on all transactions of Virtual Digital Assets (VDAs), including cryptocurrencies and NFTs.
Conclusion
India has finally accepted blockchain and cryptocurrency technologies and there will be nearly 270 million users in 2024, surpassing the combined total of the countries including the United States and Europe. Talking about the topic of Cryptocurrency and its regulations in India is still unclear to say anything about this. India lies on its first step towards making the people of India accept regular currencies as Cryptocurrencies for any further use. It remains a complex topic to discuss especially in the matter of India.
The Reserve Bank of India and the Finance Ministry of India imposed a ban on cryptocurrencies and their transactions in 2018. Later, in March 2020, the Supreme Court of India lifted this ban having the exchange and the acceptance of technologies only. India has not yet considered Bitcoin and Ethereum as legal tender like other developed countries including the USA and Europe. In addition, there are no specific licensing regimes made for cryptocurrency operators in India.
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