INSUBCONTINENT EXCLUSIVE:
Bitcoin is the first name that comes to mind when we discuss cryptocurrency.New Delhi: Ever since Finance Minister Nirmala Sitharaman spoke
about digital currencies in her Budget speech earlier this month, the curiosity about the matter has risen by leaps and bounds.Digital
currencies have been around for quite some time now and people have been resorting to the new currency quite often around the world
Many experts have also been bullish about the future of cryptocurrencies.Since Bitcoin does not rely on intermediaries, it may lower
transaction costs for businesses and emerge as a major means of electronic payment processing.Bitcoin has a clear potential for growth
considering these attributes
Of course, virtual currencies, like traditional currencies, can also be used for money laundering and other criminal activities
However, the chances are akin to the physical world.Bitcoin is the first name that comes to mind when we discuss cryptocurrency
However, there are a few more virtual currencies like Ethereum (ETH), Litecoin (LTC), Cardano (ADA), Polkadot (DOT), Stellar (XLM), Dogecoin
(DOGE) etc.Here is how you can invest in cryptocurrencies:Acquisition:Acquisition of currency involves:(i) Careful selection of the
cryptocurrency as the market of such virtual currencies is volatile and totally influenced by the market condition because it is generally
purchased for the purpose of the investments.(ii) To find the cryptocurrency exchange
There are lots of cryptocurrency exchanges, but not all exchanges work in all countries
Different exchanges also offer different types of cryptocurrencies, accept different methods of payment, and charge different fees.(iii)
Open a trading account(iv) Register the method of payment(v) Then place the order to acquire the cryptocurrency as per your choice.Use the
cryptocurrency:Now you decide to spend or hold the currency like the share market
Whether you create the portfolio
Use cryptocurrency for purchases from online retailers or buy goods or services from local merchants who accept cryptocurrency.Future of the
cryptocurrency:Speculators of virtual currencies believe that digital currency is the future
Because it can be used to meet the day-to-day payment need like other modes i.e., Money, Cards, and another digital wallet if the government
Cryptocurrency facilitates much faster than any other method of payment at minimal cost across the globe
It is believed of the user of cryptocurrency is that if this happens, then a day will also come that cryptocurrency will replace the
traditional payment system and can act as an alternative to national fiat money and traditional commodities like gold.In the Union Budget
2022-23 speech the Finance Minister mentioned that the income from digital virtual assets or crypto will be taxed
This announcement poured a certain degree of hope among cryptocurrency investors, as they believe that this move to tax them is explicitly a
clear sign of legalisation in the future.The government will charge a tax of 30 per cent flat (plus surcharge) on the gain on the
transaction of the cryptocurrency
Since it is the nature of speculation thus no deduction is allowed to calculate the profit
If there is a loss in such a transaction, it cannot be set off with any other income and cannot be carry-forwarded
However, current year losses are allowed to set off with the current year profit of such transactions.To monitor such transactions, there is
the provision of Tax to be deducted at source (TDS) @ 1 per cent
The gifting of cryptocurrency is also taxable in the hands of the recipient
All provisions are applicable from April 1, 2022.The introduction of Central Bank Digital Currency (CBDC) will give a big boost to the
Digital currency will also lead to a more efficient and cheaper currency management system
It is, therefore, proposed to introduce Digital Rupee, using blockchain and other technologies, to be issued by the Reserve Bank of India
This may remove the worries of RBI about private cryptocurrencies, claiming that they might create financial instability.(Except for the
headline, this story has not been edited by TheIndianSubcontinent staff and is published from a syndicated feed.)
