Just as the prices of stocks and currencies move up and down due to various reasons, the price of Bitcoin as well fluctuates. As a Bitcoin investor, you must be prepared to let your investments ride the wave of volatility. We have covered the following in this article:
Latest updates – Clarification on proposed Section 115BBH in Budget 2022
1. Losses incurred from one virtual digital currency cannot be set-off against income from another digital currency.
2. Infrastructure cost incurred on mining crypto assets will not be treated as cost of acquisition.
Union Budget 2022 Outcome:
1. Income from transfer of virtual digital assets such as crypto, NFTs will be taxed at 30%.
2. No deduction, except the cost of acquisition, will be allowed while reporting income from transfer of digital assets.
3. Loss from digital assets cannot be set-off against any other income.
4. Gifting of digital assets will attract tax in the hands of receiver.Losses incurred from one virtual digital currency cannot be set-off against income from another digital currency.
Bitcoin is the most popular crypto or virtual currency in the world. It is a decentralised currency that has no central bank or government as the regulator. It first came into use in 2009 and has gained wide acceptance lately. Since more corporates and individuals are accepting Bitcoin as legal tender each day, its price is soaring to greater heights. Naturally, many individuals get this question in their mind- why does the Bitcoin price fall and rise?
There are several factors that directly or indirectly influence the movement of the Bitcoin price. However, the following are the most prominent ones:
One thing to note before investing in Bitcoins is that there is no regulatory body to oversee the operations of Bitcoins. Also, Bitcoins are still not legal tender in India. It is advisable to not invest heavily in Bitcoin as there is uncertainty on whether the government would impose a total ban on Bitcoins and other cryptocurrencies. If you are to enjoy higher gains over time, you may invest in mutual funds and stocks.