The user penetration rate of cryptocurrencies has been rapidly growing in India, just like in other countries. In a report that attributed this rise to the desire for financial inclusion, Statista approximated the rate to be 7.41% as of 2024. Bitcoin is one of the many currencies millions of investors in the country have adopted, as many believe that it can be a hedge against inflation.
Thanks to things like internet advances, you now have numerous resources at your disposal to make informed decisions. Whether it’s converting BTC to INR or whatever thing you may want to do, all these are available to you with a simple touch of a button. And for those wondering about buying Bitcoin in this country, you have just arrived in the right place.
Step-by-Step Guide
It all begins by choosing a suitable crypto exchange that operates in the country. As a way to enhance regulatory compliance, India amended the Information Technology Act of 2000, which made it mandatory for new users joining a crypto exchange to undergo the KYC process.
The amendments also needed the exchange to register with the Financial Intelligence Unit. All these changes were made to enhance the accountability of those platforms. You, therefore, want to ensure that your preferred exchange satisfies all these terms before adding funds to your wallet.
Several exchanges support NEFT, banking payment methods and IMPS. Good enough, you can use UPI apps like Paytm, Google Pay and others on some platforms to invest in hundreds of currencies. Once you have added funds to your wallet, you are now ready to place your Bitcoin order – navigate to the currency’s page and choose the appropriate investment option.
To beef up the storage security of your coin, consider using non-custodial wallets, which are more secure than custodial ones because they don’t store personal information in databases – reducing chances of hacking.
More Factors about a Crypto Exchange to Consider
It goes without saying that security is non-negotiable in our modern world. A Parachute study actually revealed that scammers can carry out about 11.5 attacks on average per minute, and you don’t want to suffer prey.
Going for platforms that employ security measures like two-factor authentication, fund insurance and cold storage can help ensure that you are trading in a more secure environment. According to Google, adding 2FA could reduce exposure to automated bots by 100%, targeted attacks by 66% and phishing attacks by 99%.
User interface and experience is another factor that you can’t ignore. With mobile devices changing how we access different services today, you want to ensure that you can find similar experiences on your smartphone as you would on your laptop. It can be frustrating to pinch or zoom the interface just because the details are not clear.
A common mistake some investors make is using a platform without assessing its fees. After you have traded and want to withdraw, how much goes into the platform? What do they charge for trading? Are there any other associated fees? It might not seem like it makes sense, but cumulatively, lower fees can lead to considerable savings. And if you encounter challenges or questions, what is their customer support like?
What are the Tax Implications in India?
The government of India recognizes crypto assets as virtual digital assets (VDA) and imposes a 30% on their income. From July 2022, transfers of more than ₹50,000 (or 10,000 in some cases) were to attract a Tax Deducted at Source (TDS) of 1%.
This applies to all types of investors as long as they transfer assets of that amount within a year. Since computing taxes for those holding large amounts of transactions can be complex, implementing crypto bookkeeping software can help you manage such transactions.
Some of the activities that attract the 30% tax include:
- Mining crypto
- Using crypto to buy goods or services
- Receiving payment in the form of crypto
- Receiving crypto gifts and so on
Other Ways to Buy Crypto
Besides the traditional methods, there are other ways you can buy crypto:
- Exchange-Traded Funds (EFTs) – These allow us to see the performance of Bitcoin before directly investing. If you are seeking to diversify your portfolio in a low-risk environment, EFTs have you covered.
- Coin Sets – They are formed as index funds and are based on popular crypto themes like DeFi. Some of the popular coin sets you’ll find include Crypto Blue Chip coin sets, BTC 50:: ETH 50, etc.
- Peer-to-peer exchanges – Numerous platforms – both centralized and decentralized – now allow you to purchase currency from other holders without going through intermediaries.
Parting Words
India is one of the countries where millions of individuals have invested in Bitcoin. As many people say, knowledge is power, and you do not want to participate in an industry with limited information. This guide offers you details that can help you manoeuvre this Indian landscape with confidence.
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