Is crypto mining legal in India?
Cryptocurrency is a type of digital payment or currency secured by the process of Cryptography. Cryptography is the process of obtaining data transfer between the sender and the receiver, effectively encoding the data between these two parties only. This way, the currency or financial assets gets fully protected from counterfeiting or double-spending. It is based on a decentralized network distributed across systems making them exist outside Government Manipulation or interference.
Bitcoin was one of the first forms of Cryptocurrency. It is considered to be more secure than real money. It uses Blockchain technology to make the security of such financial assets even tighter. This is what makes it such a popular option at this moment for not just high net worth individuals but also retail investors. There is no rule concerning mining because it has neither been authorized nor any regulatory authority governing it. That is the Bitcoin Loophole that so many people have used to make a lot of profit. So, make sure you stick with us till the end.
How is Crypto Mining done?
Crypto mining is the process of adding new Cryptocurrency coins into circulation. It is carried out using specific software that solves incredibly complex and complicated computational problems. These problems are not necessarily Mathematics or related to a particular subject but can also contain challenging puzzles. Cracking these puzzles and problems is significant in maintaining blockchain technology.
The first node to solve the puzzles helps keep the blockchain technology and is awarded the next block. They are also rewarded with the new Cryptocurrency. This is an arduous process as it is not easy to crack these puzzles and usually requires a lot of time and investment. The award that they get is nothing but the creation of a Crypto-coin. This way, a new Cryptocurrency is created by mining, and the person who operates the whole process is called a miner.
The Legality and taxation of Cryptocurrency
As mentioned above, Cryptocurrency as a financial asset has no laws concerning its being legal or illegal. It is because it has neither been authorized nor been regulated by any central authority for India. To make matters even more accessible, there are no rules, regulations, or guidelines required to be followed to understand and resolve disputes that would arise when dealing with different Cryptocurrencies.
Although this makes it risky concerning having no security for the money, it is still a lucrative option for the people who want to invest in it. As there are no rules concerning any Cryptocurrency, there is no way the Government can impose taxation on the same. According to the country’s income tax laws, it is the income of any person that is taxable irrespective of the form it is collected in.
Conclusion
To conclude, we can say that mining, buying, selling, or trading Cryptocurrency cannot be termed illegal. To print a note is unlawful but buying some asset with that printed money is not. Hence, we can’t deem it illegal under any law.
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