How to Legally Convert Bitcoin into Cash in India 2024
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Declare your Bitcoin holdings
The Indian government has made it mandatory to declare any cryptocurrency holdings (including Bitcoin) in your income tax returns starting from the assessment year 2024-25 (financial year 2023-24). Failure to do so could attract penalties.
Use a registered crypto exchange
Only crypto exchanges regulated by the Securities and Exchange Board of India (SEBI) are authorized to facilitate the trading and conversion of Bitcoin into INR. Some popular SEBI-registered exchanges include Zebpay, WazirX, and CoinDCX.
Pay capital gains tax
Any profit you make from selling Bitcoin needs to be declared as capital gains and taxed at the applicable rate. As of now, the short-term capital gains tax on cryptocurrency is 30%, while the long-term capital gains tax (held for more than one year) is 20% with indexation benefit.
Know the TDS implications
A 1% Tax Deducted at Source (TDS) is applicable on all Bitcoin and cryptocurrency withdrawals from your exchange wallet to your bank account.
Keep records of your transactions
Maintain proper documentation of all your Bitcoin transactions, including purchase price, sale price, date of transactions, and exchange platform used. This will be essential for tax filing and future compliance.
These are just a few of the many cryptos that you can invest in. It is important to do your own research before investing in any cryptocurrency. Remember that investing in cryptocurrency is risky, and you could lose money.