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Cryptocurrencies have become a viable trading asset for millions of traders from various countries, and India is not an exception. However, the Indian government doesn’t seem to regulate the market, and crypto traders are currently on their own. In this article, we explain the legality of crypto in India and the main difference between brokers.
The situation with cryptocurrencies in India is mostly the same. While many traders start seeing crypto as a viable trading asset, there’s still much uncertainty about what broker you should choose or how you can make sure your money is safe. In this article, we are going to provide a brief overview of crypto trading for Indian traders.
Is crypto trading legal in India?
This is definitely the most crucial question for Indian crypto traders since many countries seem to frown upon cryptocurrencies as a whole. Indeed, the Central Board of Digital Tax and other financial authorities were against crypto trading at first, and all the Indian banks and payment processors were prohibited from working with crypto exchanges.
However, these restrictions were lifted in 2020, and now Bitcoin, Ethereum, and other cryptocurrencies are perfectly legal in India. You can freely buy, sell, or own them, but do not forget that crypto is still not regulated. While the authorities won’t punish you for trading crypto, the government won’t protect your funds in case anything goes wrong with them.
Moreover, the Indian government considers any profit made from trading cryptocurrencies as taxable, just like with any other regular asset. The tax rate for such income is set on 30 percent, but it’s still unclear how the authorities are going to make sure traders and investors don’t hide their profits.
How to start trading?
In most cases, cryptocurrency trading in India starts with choosing a broker. The most crucial difference here lays between CFD brokers and crypto exchanges. The former usually have low fees but a limited array of crypto assets, too. You also don’t really trade the currencies, instead you operate with derivatives based on their prices.
On the contrary, crypto exchanges really allow you to trade crypto or exchange it for some fiat money. However, the transactions between buyers and sellers may prove to be quite costly in terms of commissions. There are many available crypto exchanges in India, and newbie traders should look at something like Coinbase or Binance.