Cryptocurrencies in India: Know about Its Laws and Popularity

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by Shreya Mangal
| 23/02/2021
About Cryptocurrencies In India

The laws of cryptocurrencies are different in different countries in the world. Moreover, the trading procedure is planned differently by the financial agencies of every country. There is little clarity about dealing with cryptocurrencies in India. India is still in doubt about crypto assets. Let's learn more about the status of cryptocurrency in India. 

Cryptocurrency is digital money, which is based on block-chain technology and is held electronically. You may have heard about popular names such as Bitcoin and Litecoin. However, you will be surprised to know that there are many other cryptocurrencies.

People use cryptocurrencies to purchase regular goods and avail more online services. Investors prefer investing in cryptocurrencies as they do with valuables and stocks. Even though cryptocurrency is a new asset class, it can be risky for investment, especially if you are not aware of how it works.

In general, cryptocurrency is a medium of exchange that is decentralized, encrypted, and digital. There is no central agency that maintains and manages it. The management and control of cryptocurrencies are mostly distributed among cryptocurrency consumers through the internet, including real money online casinos and sports betting sites.

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History of Cryptocurrency

Cryptocurrencies came into existence in the early 1980s when a cryptographer known as David Chaum created an anonymous digital form of money. It was referred to as e-cash and was later executed through the Digicash framework. This makes the digital currency untraceable by the government, bank, or any other third party. Cryptocurrencies witnessed massive popularity amongst users worldwide after 2000.

What is the most popular Cryptocurrency in India?

Indians have a clear choice when it comes to cryptocurrencies. Bitcoin is the more popular digital currency used by a myriad of Indians for the purpose of investment or personal use. Although Bitcoin is the more well-known digital money amongst the users, there are other cryptocurrencies as well.

  • Ethereum: It is also known as Ether and it is created in a different way than Bitcoin. It works as a platform for blockchain applications, which means that other organizations can create their own money through the Ethereum platform.  
  • Litecoin: Started in 2011, Litecoin is used by many Bitcoin users. It is found to be a better and quicker alternative for transactions and payments.  
  • Dogecoin:  This was created by software engineers who wanted to create digital money that is instant with low fees. The digital money features the face of the Shiba Inu dog from the famous Doge meme.

Using Cryptocurrencies At Online Casinos India

If you play at real money online casinos in India and want to make deposits through cryptocurrencies, there are several things you must familiarize yourself with for a smooth gaming experience.

The first step is to create an account with an exchange to buy digital money such as Bitcoin, Litecoin, and Dogecoin. Once you have bought the cryptocurrencies, you can use them to transfer funds to the online casinos that accept them.

Several gambling and betting platforms also like to offer Bitcoin (or another type of cryptocurrency) casino bonuses to encourage players to use this type of payment method at online casinos

The Advantages of Using Cryptocurrencies At Online Casinos In India

Nowadays, the majority of Indians are playing at real money casinos in India for entertainment and earning money. For a smooth and safe gaming experience, new-age gamers prefer making deposits with cryptocurrencies. There are several benefits of using them:

  • Safety: The cryptocurrencies are safe to use as no third person can access them. In case any imposter has got your wallet and ID details, they will not be able to snatch your funds because of the stringent safety actions.
  • Fast: Withdrawals are usually not as quick as deposits at online casinos in India. When you use cryptocurrencies to request payouts of your winnings, you will get your money in just a few hours.  
  • Anonymous:  Most online casino players prefer keeping their identities anonymous. With cryptocurrencies, you can play anonymously without disclosing your whereabouts. This is possible because when you make payments with cryptocurrencies, you will only need to send the ID of your wallet.

The Face of Cryptocurrency Under Indian Tax Law

There are no clear laws and rules by Indian authorities for taxes on crypto assets. The revenues generated through cryptocurrency trading are not seen as a regular income. It is considered a capital gain, which is defined as the profit gained by selling immovable or moveable assets.  

In general, auditors are considering cryptocurrency as a value similar to gold or property, which can be traded to get profit instead of a currency. Thus, the laws applied to cryptocurrency are similar to the laws of capital gain. It is worth noting that the tax rates for capital gain are subjected to the holding period of the asset. In the case of cryptocurrency, it signifies that the time the user holds the cryptocurrency will decide the rate of taxes.

If any user has mined their digital money, then it will not be considered a capital asset and there will be no capital gains tax. The revenues earned by selling this digital money will be treated as the revenues from other sources, and the tax rules will be applied to it accordingly.

Soon, the Indian financial authorities will bring up crypto rules as per the request of the Supreme Court. After these new rules are framed, the taxes on cryptocurrencies will become clearer. Well, it looks like Indian cryptocurrency investors will have to pay taxes on money earned from cryptocurrency investments.

The market of cryptocurrency is still growing in India and the authorities are unclear about its tax rules. However, India is witnessing the growth in the popularity of cryptocurrency only because it is safe, fast, and easy to use.

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