Lately, Bitcoins have become a hot favorite amongst all of us with the rising prices. Indians are not left behind in this race. They are also doing all the things that they can do to Buy Bitcoin in India.
Buying Bitcoins in India was a bit difficult a couple of years back. But these days the scenario has changed completely and buying Bitcoins has become a bit easy.
Today you will get a complete guide on what is Bitcoin, how to buy Bitcoin in India, what are the legal formalities to be completed for buying Bitcoins, and where you can buy it. So, let’s take a look at all these things.
What is meant by Bitcoins?
Bitcoin is a digital payment system and this a kind of cryptocurrency. These areas same as normal currency but these do not have any physical form. Bitcoins are used for instant and secure transfer of value anywhere in the world. It is known as the first decentralized digital currency of the world which is not owned and controlled by any financial or government institution.
Why To Buy Bitcoin in India?
Bitcoin is the first completely functional and digitally native cryptocurrency in the world that has given birth to a new asset class altogether. Just a decade ago, cryptocurrencies like Bitcoin has established themselves as a good asset class. But what is the particular reason that investors should invest in it? What is the reason that everyone is looking to purchase a piece of this scarce digitally coded currency? Read here to find out the reason:
- High returns and top-performing asset
One of the fastest-growing asset classes is cryptocurrencies, and Bitcoins used to hold around 69% of the market share. The price of Bitcoin is very highly volatile, i.e. the cost of the Bitcoin may swing far up and down from the average price of the currency on an hourly basis. But such volatility in the market used to serve as a benefit to risk-friendly traders and investors who are looking to make high and quick returns from their investment.
- Alternative barrier to inflation
The economy-wide enhances at the prices of services and goods over time is called inflation. It used to diminish the purchasing power of money. Initially, Bitcoin was designed as a deflationary asset. The limited of it and Bitcoin Halving act as catalysts against inflation.
In the past days, people used to invest in gold as an asset for the protection of themselves against inflation. Most of the people over the past couple of years have found Bitcoin to be a better alternative asset.
How To Buy Bitcoin in India?
You can bitcoins from some trusted Bitcoin apps in India. There are many such apps available from which you can buy bitcoins in India. If we name a few these are Coinmama, UnoCoin, CoinSecure, Zebpay etc. It is your other task to choose the best platform to buy them.
These online exchanges or apps will facilitate you to buy, sell, and hold Bitcoins. By making use of LocalBitcoins you can also do person-to-person Bitcoin trading. It makes use o escrow protection for keeping the security of transactions.
Generally, it would be better for you to make use of an exchange that facilitates its users to withdraw their Bitcoins to their own personal wallet for keeping it safe. There are also many exchanges that do not serve with this facility.
However, it is not required to tell, but anyways we are here to make you aware of everything. When you are going to create an account on online exchanges, it is very crucial for you to make use of safe internet practices like you should use a unique and strong password, two-factor authentication, etc.
There are many Indian exchanges that have a requirement of KYC (Know Your Customer). This process has a requirement of verification of your identity by making use of your government-issued ID cards like PAN Card, address proof, and your bank account details.
Once you place an order, you can buy bitcoin in India by making use of digital payment methods. You can transfer money from your bank accounts by making use of NEFT, RTGS, debit, or credit card. The value of one Bitcoin as of today is at $35,563 which is rough Rs.26 lakhs. But you are not required to buy a complete Bitcoin for the starting of your Bitcoin investment. You can start investing in Bitcoin by chipping in as low as Rs.500.
What is the legal procedure to buy Bitcoin in India?
At first, you are required to get yourself KYC (Know Your Customer) verified. For this, you are required to submit your valid address proof and your PAN card. Next, you are required to submit your bank account. You are required to ensure that the bank account and PAN must belong to the same person. The process of verification used to take about 2-3 working days. After this, you are free to Buy Bitcoins in India.
How can you set up Bitcoin Wallet?
The Bitcoin apps used to ensure that you are having a bitcoin wallet that assists you in selling and storing bitcoins. These wallets are set up when you create your account and sign in to your account.
How Can You Ensure That Your Bitcoin Is Stored Safely?
You are required to ensure that your Bitcoin is stored safely after buying your Bitcoins. Bitcoins are generally stored in Bitcoin wallets which can be offline storage like a USB drive which is known as cold wallets. But there are also online wallets that you can use that include PayPal, which are known as hot wallets.
In the past, Bitcoin wallets have faced multiple hacks. And this is the reason that many people used to prefer to keep at least part of their investment in a cold wallet.
Are the returns that I get from Bitcoins taxable?
Still, there is a lack of clarity on the tax front on Bitcoin investment in India. As per CoinDesk, investors based in India may soon be required to pay taxes on their returns from Bitcoin investments.
With the enhancing value of Bitcoins, whatever income you get from Bitcoin is taxed at 30 percent tax on cryptocurrency gains if you have short-term investments around and if you have long-term investments then you are required to pay 20 percent tax for that. However, you are not required to pay money as long as you don’t sell the Bitcoin simply because the value of it has gone.