The legal status of cryptocurrencies in India | SRIRAMs IAS (2024)

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The legal status of cryptocurrencies in India | SRIRAMs IAS? ›

It has been a topic of considerable debate and regulatory scrutiny. Cryptocurrencies are not illegal in India, meaning individuals can buy, hold, and trade cryptocurrencies.

Is Cryptocurrency In India Legal or Not? Cryptocurrencies are not regulated by any central authority in India as a payment medium. There are no rules, regulations, or guidelines for settling disputes while dealing with cryptocurrency. So, trading in cryptocurrency is done at investors' risk.

RBI Circular & Supreme Court Verdict: There was a Reserve Bank of India (RBI) circular in 2018 restricting banks from dealing with crypto businesses, but the Supreme Court overturned it in 2020. Cryptocurrency isn't illegal in India, but it operates in an unregulated space.

In the present time, India does not have any Law or provision which specifically deal with Cryptocurrency. Although Government is coming with a bill to ban Cryptocurrency in India. Bu with this also, Government is also launching its own Digital currency.

Cryptocurrencies as a payment medium are not regulated or issued by any central authority in India. There are no guidelines laid down for sorting disagreements while dealing with cryptocurrency. So, if you wish to trade crypto, do it at your own risk.

The government is aware of the fact that virtual digital assets are a part of both Indian as well as the international economy. While cryptocurrency is not banned but they are charged with a 30% tax as announced in the Union Budget of 2022.

The gains from trading cryptocurrencies are subject to tax at 30% (plus 4% cess) as per section 115BBH. Any transfer of crypto assets on or after 1 July 2022 for an amount of Rs. 50000 or Rs. 10,000 in some cases is subject to a Tax deducted at source (TDS) at 1% under section 194S.

According to the police, around one lakh people in Himachal Pradesh were swindled through various websites and crypto coins, by luring them with promises of double returns. “The masterminds of the crypto racket created around 2,50,000 fake IDs for the fraudulent activity.

Investors can purchase Bitcoin on cryptocurrency exchange platforms, ensuring it is registered with the Financial Intelligence Unit India. Select an exchange with a user-friendly interface and extensive support for BTC trading pairs. In addition, look out for considerate trading fees.

Yes, you can exchange cryptocurrency for cash in India. While there are some regulations in place, you can use various methods to convert your crypto to INR, including: Cryptocurrency exchanges: Platforms like WazirX, CoinDCX, etc., allow you to sell your crypto and withdraw the funds to your bank account.

Which cryptocurrency is best in India? ›

Cryptocurrencies such as Bitcoin, Ethereum, and others are not recognized as legal tender in India. However, trading and investing in crypto is not illegal. The Indian government has implemented a 30% tax on income from the transfer of digital assets and a 1% TDS on transactions exceeding INR 50,000 annually.

India has taken a tough stance against cryptocurrencies since 2018, with the Financial Intelligence Unit (FIU) issuing show-cause notices to nine offshore cryptocurrency exchanges in December 2023 for non-compliance with local rules.

Today's Cryptocurrency Prices by Market Cap

The global crypto market cap is $2.03T, a 1.36% increase over the last day. The total crypto market volume over the last 24 hours is $64.72B, which makes a 8.79% decrease. The total volume in DeFi is currently $2.92B, 4.50% of the total crypto market 24-hour volume.

The cryptocurrency market has seen growth and challenges. Different countries have varying views on crypto. India is developing a crypto market with predicted growth in NFTs, play-to-earn gaming, decentralized finance, and changes in centralized exchanges.

Is it legal to use cryptocurrency in the US? Yes, it is legal to use, buy and possess cryptocurrency in the US.