Cryptocurrency in India
The recent years have witnessed the term cryptocurrency quickly gaining ground and popularizing its worth and utility among the common people. Though it looked alien and somewhat intimidating in the beginning (like debit/credit cards did), people soon took to cryptocurrencies and related transactions and investments. However, Bitcoin, one of the most well-known and popular cryptocurrency, has not received a warm welcome from the government or RBI. In fact, they have continually warned against this as there is no capital protection in this. So, the possibility of Bitcoin tax calculator seems dim.
Benefits of cryptocurrency
Zero scope for frauds: Owing to their digitalized format, they cannot be forged or reversed by the user.
Instant Settlement: There is no space for third party involvement and the transaction can be completed instantly at no additional cost.
Cost-effective: As of now, cryptocurrencies do not levy transaction charges though their e-wallets might require nominal maintenance costs.
Identity theft is impossible: Cryptocurrency is endowed with a ‘push’ mechanism that lets you transfer only the required amount and no other info.
Easier accessibility: High speed and low cost internet access has become universal and those with no access to traditional exchange can own a cryptocurrency wallet.
Decentralized technology: An international network of computers use blockchain technology to handle the database of transactions.
Tax on Bitcoin in India
With the ‘rags to riches’ stories circulating around cryptocurrencies, especially Bitcoin, the Centre is seriously contemplating to bring the investors under the tax regime. The Central Board of Direct Taxes (CBDT) has already announced that people who made money out of Bitcoin must declare and pay the relevant tax. The department is all set to sent legal notices to non-compliers. Government is still inclined towards making Bitcoin completely illegal and is awaiting suggestions from the committee appointed for this purpose. Even if it may not be abolished altogether, there will be some kind of a regulator and set tax rate slabs.
How does cryptocurrency works
It works as a deal between the cryptocurrency e-wallets included in the blockchain technology. For instance, you can send a request to the Bitcoin network to buy a product. Bitcoin wallet has an undisclosed data piece (seed or private key) to digitally sign transactions. And this signature cannot be forged or altered. This serves as a proof that the transactions are made from the account owner’s wallet. Every transaction is broadcast recorded between account owners and the network confirms the transaction within minutes using a process called mining. Then it gets included in the blockchain.