3 Costs Associated With Bitcoin And Other Cryptocurrency Transactions In India
Although regulations surrounding cryptocurrency trading are still unclear, bitcoin and other cryptocurrencies are rapidly gaining popularity in India. These cryptocurrencies have attracted interest due to the rapid adoption of bitcoin by institutional investors and the adoption of bitcoin in El Salvador as a legal tender. These cryptocurrencies are considered to be as good as gold and can be used as an inflation hedge.
Learn all about the costs involved in trading bitcoins and other cryptocurrency in India
Before you can transact in Bitcoins or other cryptocurrencies, such as with stock, gold, etc., it is necessary to be KYC compliant. You will need to provide all necessary documents, including PAN, aadhaar and bank account details.
In India, the maker-taker model is used to decide the fee structure. Others, such as Zebpay, have set a monthly fee of 0.0001 BTC. This can be avoided if you engage in at least one trade per month.
The price is set by the maker, and the taker matches it.
According to buyucoin.com, i.e. The maker-taker fee for each trade on a global cryptocurrency exchange in India is 0.24%. All prices include GST.
When you plan to sell bitcoins or other cryptocurrency holdings, this fee will be charged. This is where you will need to verify that your exchange allows you to transact. In general, cryptos can only be created up to the 8th decimal. This will tell you exactly how much you can sell your holdings.
Additional withdrawal fees vary from crypto to crypto. In the case of bitcoin, it is 0.001368 for maximum withdrawal of 10 BTC.
It is 0.00864 Ethereum according to buyucoin.com
According to Zebpay, all crypto deposits are subject to a fee. The fees vary depending on how the money is transferred. If it is done via net banking, for example, it costs Rs. For bank transfer, it costs Rs. 7. There are also specific deposit limits for each cryptocurrency, i.e. Both minimum and maximum.
The Buyucoin platform does not charge any deposit fees to trade in cryptocurrencies via their platform/platform.
These fees are not the only costs. You will also have to pay taxes for capital gains that you make by selling your cryptocurrency holdings. While there are many aspects and facets to consider when deciding on taxation, it is important to remember that if you view the trade in these cryptocurrency holdings as an investment, then 20% taxation will apply for long-term gains, while the individual slab rate will be applied for short term capital gains.