Current challenges with Bitcoin/Crypto in India:

1. You are taxed a flat 30%, plus a 4% cess and 1% TDS on profits from Bitcoin.

2. You cannot offset your losses. Even if your net profit is zero or negative in a financial year, you must still pay taxes on profitable transactions, and your losses will be ignored.

3. You can only buy crypto from Indian exchanges. If you attempt to purchase from international exchanges, your bank will always decline the transaction. However, you can still engage in peer-to-peer (P2P) transactions on international exchanges.

4. When buying from Indian exchanges, you must complete KYC, and you are not allowed to withdraw crypto to a non-custodial wallet.

5. If you buy crypto via P2P on international exchanges, these platforms are required to share all transaction data with the Indian government. You may then face up to a 70% tax (including penalties) on the total crypto value, not just the profit, due to the lack of proper documents or purchase receipts in P2P transactions.

6. If you buy crypto via P2P on decentralized exchanges (DEXs), the government tracks sellers and their bank accounts. If you send money directly to a seller online, there is a high chance your bank account will be frozen. You would then need to visit the cyber cell to explain the transaction to unfreeze your account. If you cannot explain the transaction or mention crypto, you may face up to a 70% tax.

7. In the case of P2P online transactions on DEXs, there is a high risk of receiving illegal funds, which could result in a lien or freeze on your bank account. That's why most sellers not accepting online payments.

8. So the only option for buying crypto in India is through face-to-face deals using cash. However, this carries the risk of getting robbed, especially when dealing with large amounts or if you are new to the process.

Yes, it’s a complete mess.

Despite all these challenges, more and more people in India are buying Bitcoin every day and that makes me happy. 😊

#bitcoin #india