About bitcoin in india

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Bitcoin in India: Live INR Price, Best Exchanges, Taxes, and History

India’s general attitude towards cryptocurrency has been negative. In 2017, the central Reserve Bank of India (RBI) considered a now-defunct proposal to introduce its own cryptocurrency, Lakshmi. It has also been looking into encouraging blockchain technology in financial and payment institutions. But the government has shunned cryptocurrency with policymakers opting to outlaw cryptocurrency with incarceration and legal petitions. Bitcoin is not recognized as legal tender and, as of 23 July 2019, the Banning of Cryptocurrency and Regulation of Official Digital Currency Bill has been proposed. Unocoin, an India-based exchange, allowed individuals to trade Bitcoins but is now disabled. However, Bitcoin is still traded in India through digital currency exchanges like ZebPay, CoinDelta and CoinSecure. Many bitcoin traders usually buy through diaspora networks in countries where it is legal tender.

Is Bitcoin Legal in India?

Bitcoin is not legal in India. In 2018, India’s central bank, the Reserve Bank of India (RBI) announced a ban on the sale or purchase of cryptocurrency for entities regulated by RBI. The RBI ban has also discouraged the overall cryptocurrency market in India, since crypto assets have been accused of financing illegitimate activities. In July 2019, The “Banning of Cryptocurrency and Regulation of Official Digital Currency Bill 2019” draft has proposed a 10-year prison sentence for anyone who “mines, generates, holds, sells, transfers, disposes, issues or deals in cryptocurrencies.”

How to Buy and Sell Bitcoin in India

The downward trend in cryptocurrency trading in India is mostly due to increased government regulations. However, this does not stop people from trading. Two ways in which many Indians trade are: 1) Exchanges and 2) P2P methods. Both these steps follow the KYC norms and usually require documents like Pan card, Aadhaar card or passports.

Top Bitcoin Exchanges in India

Since banking institutions have banned cryptocurrency trading in India, popular exchanges like ZebPay have had to shut down. Nevertheless, the following top exchanges are still currently used in India:

Unocoin

Unocoin was founded in 2013 and is the leading bitcoin exchange in India. It is backed by investment from the USA and is a regulated company offering low 1% fees which fall to 0.7% with increased trading volumes. It is a relatively easy exchange platform, allowing users to buy cryptocurrency with any Indian bank account. However, with the banning proposal at hand, things might get challenging for Unocoin.

WazirX

One of India’s most trusted exchange platforms, WazirX was founded in 2018. It focuses on exchange-escrowed P2P services to enable customers to continue to withdraw INR. WazirX follows the KYC norms, has a mobile application for both Android and iOS users and also claims to provide multiple hundred transactions per second.

Other methods

Outside of exchanges, P2P trading platforms enable bitcoin purchases in India, in spite of the bank bans. Two important P2P marketplaces in India are:

Paxful is a peer to peer marketplace founded in 2015 that allows buyers and sellers to meet online and trade directly Bitcoin with each other. Sellers on Paxful accept over 300 payment methods, including the major Indian payment methods like PayTM, Bheem, Phonepe. As a result, many Indians use Paxful due to ease of access and payment. There is also no fee for ht site itself, since the Bitcoin is traded at a premium.

LocalBitcoins supports the most popular payment methods and allows individuals from different countries to purchase Bitcoin for their local currency. LocalBitcoins currently operates in several major Indian cities like Mumbai, Hyderabad, Kolkata, Delhi, Ahmedabad, Chandigarh, Pune, Guwahati and many more.

Again, due to the 2019 Supreme Court Proposal, many exchanges and marketplaces are wary of the Indian government’s attitude towards cryptocurrency in general. As of September 2019, there are no Bitcoin ATMs in India.

India’s Tax Rules on Bitcoin Profits

For the individual investor, gains from Bitcoin have to be declared as profit or capital gains in year-wise statements. As such the tax rates are subject to the holding period of the asset. For short term gains, the amount is added to the individual’s income tax bracket. For instance, someone who earns over Rs 10 lakh ($14,614), they will be taxed at 30%. For long term gains, this individual will be taxed at 20%. Once an indexation benefit is applied and inflation is adjusted, the tax rate can go down further.

For a trader, bitcoin profits are treated as income from a business. As such, certain expenses related to business, office maintenance, such as buying a computer, internet expenses, office rent, administration cost, etc.,can be deducted. However, if the turnover crosses Rs. 2 crore ($279,400) mark, a tax audit is required.

For those who mine cryptocurrency, profits will not be treated as a capital asset. As such, there is no capital gains tax. However, if it is sold then the Bitcoin will be taxed and considered as “income from other sources.”

Where to Spend Bitcoin in India

Most Indians trade and mine bitcoin to store them in digital web wallets instead of spending them to buy something. Regardless several ventures have been in place to use Bitcoin for spending. Unocoin has been the most prominent in this sector. In 2017, it linked up with BookMyShow, an online cinema ticketing platform. This venture allowed customers to top up their accounts for movie tickets with Bitcoin. Unocoin also launched a ‘merchant gateway’ which enables business entities to accept bitcoins. Sellers like Sapna Book House, bus ticket booking portal eTravelSmart and Dharwad International School take payments from customers through the Unocoin gateway.

A more unique Bitcoin experience, Suryawanshi restaurants in Bengaluru’s Indiranagar and Whitefield neighbourhoods accept bitcoin as a mode of payment, alongside the usual cash, cards, and Paytm. Due to a strong diaspora tradition, many Indians also use bitcoin on multinational sellers like Dell and Steam but get their shipments through relatives/shipping companies abroad.

History of Bitcoin in India

In a bid to fight corruption and terrorism, on November 8, 2016, Prime Minister of India Narendra Modi shocked the nation by demonetizing Rs. 500 and Rs. 1000 currency notes – sparking a new interest in the digital currency and other cashless mechanisms such as internet banking, digital wallets, credit cards etc.

The demonetized notes amounted to 86% of India’s cash in circulation. India is a country where 87% of transactions are done in cash. Chaos was inevitable.

This resulted in long queues at the ATMs and banks for weeks. There was not enough cash with the banks to dispense. People holding cash could deposit their money in the bank accounts or exchange for new Rs. 500 and Rs. 2000 notes before 30 December.

People who were hoarding “black money” (unaccounted cash) could not deposit money into their accounts because banks were keeping a close eye on suspicious deposits.

What options do these people have? Let go all of their money? Well some of them did exactly that. Old notes were found floating in the river.

While others turned to look for commodities to hedge the risk of an economic slowdown; some bought gold, some bought silver.

What did government do to curb this? They started raiding gold jewellers. When gold wasn’t working, people were buying silver which significantly increased the demand of silver.

With gold and silver being targeted by authorities, these souls saw Bitcoin as a safe haven. Using their connections and by paying up to 30-35% premium they started buying Bitcoins with cash.

Bitcoin price started to surge and weekly volume of bitcoin trading nearly doubled.

Not to forget, India is one of the largest remittance markets with a total value of more than $70 billion. On this a user usually pays up to 15% in bank charges and conversion fees. This is where Bitcoin’s true potential lies.

To understand how Bitcoin may progress in India it will be beneficial to know the role gold plays in Indian society. An American couple’s most valuable asset is typically their home, income and education. An Indian couple’s possession of gold touches on all these areas.

It is fair to compare Bitcoin to gold, as they both are liquid commodities. Bitcoin as a result can be seen in the middle of fiat currency and gold – only lacking the cultural weight that gold has.

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How to Buy Bitcoins in India

By: Ofir Beigel | Last updated: 5/2/21

Looking to buy Bitcoin in India? In this guide I will review the status of Bitcoin in India, its popularity and the different exchanges you can use to get Bitcoins in India.

Buying Bitcoins in India Summary

While Bitcoin is not accepted as a currency in India, it is possible to own and trade it on exchanges. To buy Bitcoin in India, follow these steps:

1. Get a Bitcoin wallet
2. Go to Coinmama
3. Choose the amount of Bitcoin you wish to buy
4. Enter your payment information and Bitcoin address

If Coinmama doesn’t work out for you, here are a few additional exchanges that accept customers from India.

That’s how to buy Bitcoins in India in a nutshell. If you want a more detailed review about keep on reading, here’s what I will go over in this post:

1. Is Bitcoin legal in India?

On the whole, Bitcoin’s legal status in India is not too positive. While not officially banned, India’s finance minister has stated that the government does not recognize Bitcoin as a legal currency, and reports have surfaced about another ban attempt. Moreover, banks are closing accounts that are suspected for being involved with Bitcoin.

The bottom line: While it is still possible to buy and hold Bitcoins in India, you are risking the closure of your bank account. Also, it would be hard to trade or use them for anything within the country.

2. How popular is Bitcoin in India?

Considering the size and population of India, it has the potential to be a huge market for Bitcoin. Bitcoin’s popularity in India is growing, with trading volumes in 2021 being around 112M INR on average, comparing to 2020’s

Interest in Bitcoin in India is presented below by Google Trends, with the search term Bitcoin spiking between August ‘17 – March ‘18, and then going into a slump until November 2020. It is now showing signs of higher interest in 2021:

3. Main Indian Bitcoin communities

There are a number of Indian Bitcoin communities online. These are particularly useful for staying up to date with the latest news as well as for getting advice on the best Indian Bitcoin exchanges and the like. In particular, it’s worth checking out the following forums and pages:

4. India-based Bitcoin exchanges

There are a number of Indian Bitcoin exchanges, with the more popular ones being regulated and require ID verification.

Giottus

Giottus is an Indian exchange founded by two alumni of the Indian Institute of Management Calcutta (IIM-C).

The exchange facilitates INR deposits and withdrawals to buy Bitcoin, as well as more than 70 other different cryptocurrencies.

Giottus charge no deposit or withdrawal fees for INR, but feature a flat trading fee of 0.25% for buy orders and 0.15% for sell orders. USDT trading pairs ave lower fees, at just 0.07% on each trade.

Users have to verify their mobile number for compulsory 2-factor authentication, as well as a form of ID.

Giottus’ user interface isn’t the prettiest compared to some other exchanges, but it’s more than enough to get the job done.

CoinDCX

CoinDCX is an Indian cryptocurrency exchange which was founded in 2018. It has backing from some very notable names in the industry, including Coinbase and 100x, the owners of BitMEX.

The exchange enables users to buy more than 100 cryptocurrencies instantly with INR, by linking their bank account. It even has a mobile app – CoinDCX Go – which is designed especially for making instant purchases.

INR trading pairs have a flat fee of 0.1%, while crypto-to-crypto trading ranges from 0.1-0.2%.

Unocoin

Unocoin, was established in 2013 and allows users to buy Bitcoin with any Indian bank account.

Backed by investors in the United States, Unocoin is a regulated company in India and offers low 0.7% fees which fall to 0.5% with increased trading volumes. It’s an easy Bitcoin exchange to use, but it does require ID verification.

5. International exchanges available in India

You’re not just limited to Indian Bitcoin exchanges when buying and selling Bitcoin in India. Below are a few other options available to you:

Coinmama

Coinmama may be based in Israel, but it’s available in a huge number of countries, including India. It was launched in 2013, and it offers convenience: you can buy Bitcoin with a debit or credit card.

The downside is that the fees are on the high side at up to 5.9% per transaction, plus an additional 5% per credit or debit card transaction. You can read my full review of Coinmama here.

CEX.IO

CEX.IO is available in most countries around the world. Founded in 2013 with its headquarters in London, this cryptocurrency exchange allows users to buy and sell Bitcoin as well as a selection of altcoins.

Both credit cards and bank transfers are accepted payment methods with low fees of 0%–0.25% on trades. CEX.IO offers both a trading platform and a brokerage service, both entail different fees . You can read my full CEX.io review here.

Paxful

Paxful is a P2P marketplace, which allows buyers and seller to meet online and trade directly Bitcoin with each other. Founded in 2015 and by now they have offices in multiple cities around the world.

Sellers on Paxful accept over 300 payment methods, including the major Indian payment methods like PayTM, Bheem, Phonepe. If you’re buying Bitcoins on Paxful, you won’t have to pay any fee to the site itself, but the price of Bitcoin is traded at a premium because of this.

You can read my full Paxful Review here.

Changelly

Changelly is an exchange which was founded in 2015. It allows instant crypto-to-crypto swaps, as well as purchases and sales involving fiat via their payment partners. Signing up for an account doesn’t require any personal information, and you’ll then have a quick and easy way of exchanging cryptocurrency from one wallet to another.

Crypto-to-crypto trades have a lo 0.5% fee, however buying or selling with fiat will come with some hefty charges of near 10%. You can read my full Changelly review here.

6. How many Bitcoin ATMs are there in India?

As of 2021, there is currently a single Bitcoin ATM in India, according to CoinATMRadar.

7. Frequently Asked Questions

Is Unocoin Legal in India?

Yes, Unocoin is legal to use in India, however banks may freeze accounts dealing with Bitcoin.

Is Zebpay Closed?

Zebpay announced its closure on September 2018 following a ban from the Royal Bank of India (RBI) denying banks from providing financial services to crypto exchanges.

The exchange has since relocated to Europe and now services the EU and Australia.

Is Bitcoin Banned in India?

While India doesn’t consider Bitcoin illegal, the banking sector is highly against cryptocurrency activities and frequently freezes accounts that deal with cryptocurrencies.

8. Conclusion

As can be seen, Bitcoin’s status in India is a bit on the downside. With the government banning the use of Bitcoin as a currency and exchanges like Zebpay and Koinex shutting down, things seem pretty grim.

As long as the government’s (and the banks by extent) hostility towards Bitcoin will continue, it is hard to see a more widespread adaptation of Bitcoin and cryptocurrency in general in India.

Know of additional ways to buy Bitcoin in India? Have you had experience with the ones I’ve mentioned above? Let me know in the comment section below.

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