How to Invest in cryptocurrency in India has also become a much-discussed subject. With Bitcoin, Ethereum, and other cryptocurrencies in the news, Indians are enthusiastic to test their luck in this new-age investment. But prior to jumping in, you must know the basics. In this guide, we will walk you through investing in cryptocurrency in India step by step.
Is Crypto A Legal in India?
First things first—most people ask, “Is cryptocurrency legal in India?” And the answer is: Yes, but with some conditions. The Indian government hasn’t prohibited cryptocurrencies, but they are not legal tender either. You can invest in them, trade them, and hold them, but there are tax implications. The government imposed a 30% tax on crypto gains in 2022, so keep that in mind while investing.
Step by Step Guide to investing in Crypto in India:
(1) Choose a Reliable Crypto Exchange:
The first step is to select a cryptocurrency exchange where you can buy and sell digital assets. Some of the most popular and trusted exchanges in India are:
- WazirX
- CoindcX
- Unocoin
- Zebpay
These platforms are user friendly and you can trade in different types of cryptocurrencies in India.
(2) Complete KYC Verification:
To follow Indian regulations, all exchanges require users to complete the Know Your Customer (KYC) process. You will need:
- Aadhar Card
- A Bank account Linked to Your Name
- A Selfie or Your Live Verification
- Pancard ( if required)
Once YOUR KYC will be approved you can start trading.
(3) Deposit Funds In to Your Account:
Most Indian exchanges are allowed deposits via UPI, bank transfer, or debit/credit cards. Simply choose your preferred payment method and deposit INR into your crypto exchange platform.
(4) Buy your First Cryptocurrency:
Now comes the exciting part—buying your first crypto! Beginners usually start with well-known options like Bitcoin (BTC), Ethereum (ETH), or Ripple (XRP).
Here’s how you do it:
- Go to Trading option on your Exchange or Platform.
- Select Cryptocurrency you want to Buy.
- Enter the Amount in INR.
- Click Buy and confirm the transaction.
(5) Store Your Crypto Safely:
While exchanges provide wallets, it’s safer to use external wallets for long-term storage. There are two types:
Hot wallets are online, easy to access and chances are higher to hack while cold wallets are safer and easy for long term storage.
(6) Keep track and Stay Updated:
Crypto markets are highly volatile, prices can be changed drastically within minutes. It’s important to:
- Follow crypto news on platforms like CoinMarketCap or CoinGecko.
- Use portfolio tracking apps like Delta or Blockfolio.
- Stay updated with government regulations in India.
Best Strategies for Cryptocurrency in India:
(1) Start Small: Crypto is risky. Never invest more than what you can afford to lose.
(2) Diversify Your Portfolio: Don’t put all your money in one coin. Invest in multiple assets.
(3) Use SIP (Systematic Investment Plan): Some Indian platforms allow you to invest in crypto using a SIP-like method, where you invest a fixed amount regularly.
(4) Avoid FOMO (Fear of Missing Out): Many people buy coins when they see a price surge. Always do your research before investing.
(5) Secure Your Assets: Use strong passwords, enable two-factor authentication (2FA), and never share your private keys.
Understanding Crypto taxes in India:
As per the Indian Government’s Guidelines:
- A 30% tax is levied on profits from cryptocurrency trading.
- A 1% TDS (Tax Deducted at Source) is deducted on transactions above a certain limit.
- Losses from crypto cannot be offset against other income.
Make sure to report your earnings while filing your Income Tax Return (ITR).
Final Thoughts
Cryptocurrency investment in India is exciting but comes with risks. If you’re a beginner, start with a small amount, learn the market trends, and stay updated on government regulations. With the right approach, crypto can be a rewarding investment avenue for Indian investors.
Happy Investing!
