Topic: Do you have a KYC verified account on Indian exchanges - read this! (Read 455 times)

Frankly speaking. I think KYC is important when it comes to P2P transactions. It might be exposing your identity but don't forget that you are receiving money into your Bank account and you would definitely don't want money into your account from an unsafe source. A source which might have laundered this money he is sending you. KYC on exchanges ensures that the other person has gone through using his basic documentation. Even though it might even be fake but good chances are it's authentic. So in the worst of cases, you at least can shift the blame onto the exchange for transacting a person who was verified in the first place by the exchange. On such a site you are trusting the person at your own risk.

Not every p2p platform demands KYC for example Localcryptos which is one of the good non KYC peer to peer trading platforms for Indians.

https://localcryptos.com/Bitcoin/India

Click the above links to get the deals to buy and sell bitcoins for INR, well still the biggest disadvantage of non KYC trading platform is their prices which are actually non profitable for the user, only advertisers are going to make profits there.

You can certainly claim this digit as 99.

For example, the valuation of one property is 50L. The bank itself values this by sending valuers to the site. Now dastavej (property-owning document) will be of mere 20L (15 in most of the cases) which means that the seller has sold his property at 20L so the seller will have to pay less tax on capital gain and he will forcibly demand 30L in cash from the buyer otherwise, he would not sell it. This is "extremely common" in property cases.

If the government raid just one place and filter such brokers and sellers, oh man! this can be turned out to multi-billion tax fraud.

p2p platform also demands KYC verification in order to facilitate smooth transactions. any recommended p2p platform in India?

Your definition of economic growth is very much different from what me and most of the bitcoiners think. A self-sufficient individual who can spend his money with complete autonomy, can put complete trust in the money and transaction he made or received, no fear of confiscation or ban - for me this is the definition of Utopian Economy and bitcoin helping it achieve. Government and politicians are demeaning bitcoin only for their personal gains.

Fun Fact: Only 2.5% of the Indian population pay income tax and they taunt bitcoin for tax evasion. 

---

Remove cryptocurrency and what are we left with? Government have to understand that blockchain is only meant for finance. Storing medical records, government tenders, etc etc - those all bullshit serve no real purpose. The prime reason behind the success of bitcoin is the financial motive attach with it. People got a foolproof system in their hands which is controlled by no one, very-very difficult to mutate but still can be verified and trusted by anyone; these factors have created impeccable valuable intangible asset which no tangible asset could match.

All those who say standalone blockchain (without cryptocurrency) can change the world, bla bla - they actually have no idea how blockchain works. Blockchain is more than just adding data in chunks to a database.

---

It's not about creating a formalized structure, it's about creating a formalized structure for Bitcoin. Otherwise, let alone biggest brains, even I can create a cryptocurrency with ecosystem which can only be traded on a single market, every transaction made will be recorded with complete details of sender and receiver, tax will automatically be calculated and deducted from user's wallet. But will the people adopt such cryptocurrency? I bet they won't! Bitcoin by its very nature is pseudo-anonymous and peer-to-peer. You don't even have to use Exchange, just create a transaction on your system, sign it with valid signature and broadcast it to the network. No matter how much anyone tries, you can't account for every transaction and create a so-called formal structure.

---

I disagree. When you are using the word 'cryptocurrencies', you have brought the old players like Monero (XMR) into the talk as well. Unlike bitcoin, Monero provides insanely high level of privacy and anonymity by obfuscating the sender, amount and receiver. Even bitcoin is highly anonymous but requires higher technical know-how to maintain the privacy. And if anyone is able to trace someone through blockchain then bitcoin wallets are to be blamed which mix together various UTXOs of the user without user even realizing. If a user is concerned about his privacy, he should first learn the concept of UTXO and how bitcoin transaction works. Then, he should use a wallet which provides greater control over UTXOs and option to the user to manually select the UTXOs to be spent!

So I will answer your question in two streams.
1. It's about the convenience to the government. Trust me if people wouldn't have been habitual of making cash payments since history government would have placed an outright ban on the use of cash long ago! It's just that it has been a means of settlement for centuries and an abrupt ban would leave the Uneducated or unaware population in trouble leading to loss of vote bank. Bitcoin on the other hand offers no such issue to the government. Look at it from the perspective of government? If there is a technology which helps people evade taxes and I don't see any great impact of Bitcoin on the Economy and neither does banning it hampers my vote bank why shouldn't I ban it? They have already said blockchain is a technology that they surely want to adopt.

2. When we say that formalized structure is impossible we actually are underestimating technology. I mean there was just one man or one team which created a legendary currency called Bitcoin. On the other hand we have the biggest brains of the country/World who have even been able to explore outer space. If they work upon such an idea I don't think it's that tough for them to place a formalized structure. I know this sounds imaginary but you can't deny the possibility of it. Moreover, I think a mere outright ban of Bitcoin and adding it in either the COFEPOSA Act or the PMLA Act would make Indians reluctant towards it. No one wants to mess with the system if such a thing happens atleast 95% would themselves leave the crypto arena without any actions from the government. We still have fear of the law in India. Moreover many investigative agencies have proved that it's not that difficult to trace out trail of your bitcoin so a couple of investigations by government would be enought to instill such a fear. Cash is Cash because it does not leaves a trail. Same cannot be said for cryptocurrencies.

Cash is as anonymous as ever. People only become subject to scrutiny when they make mistake in spending the cash and leave behind trails. It's like spending your mixed bitcoin with unmixed UTXO and losing the privacy. Even today, cash manipulation happens in more than 90% cases of the property sales. The registry value of the property is shown below the actual deal price and rest of the payment is made in cash. No government measure can catch these tax evasion transactions if seller is clever enough to maintain the secrecy of cash received.

That's why I said that if government targets bitcoin as some safe-haven for tax evaders and justifies banning it or charging excessively high tax due to the same reason, it better be ready to ban cash as well. As far as trails are concerned, cash is much more anonymous than bitcoin.

I partly agree with this but you are using the precedent of what has happened till now to speculate on the future for BTC. Cash transactions allowing you anonymity has decreased quite a bit. Its all formal corruption now. The same is not the case for real-estate transactions but just wait till this new, so-called" tech-savvy" government starts linking properties to Aadhar and then to PAN cards.

The space for anonymous transactions is being continuously strangled down. When it comes to corruption, the tax evasion issue is understandable. But the intention of this Govt is in line with those of international financial institutions to turn India into the biggest market with 130 consumers who work their asses off, buy stuff and have every bit of their transactions traced to pay the maximum amount of taxes. All of this when the citizens don't get basic amenities in return for those taxes.

The whole logic of "people should pay taxes" on BTC is kindda backwards. Retail investors like us making small amounts shouldn't have their transactions KYC'd and tracked. We are small fish. (Although, you are sort of a dolphin yourself now, LOL). The problem lies with the way public money is spent in India. That is where they need transparency. But well, nobody asks the fucking government to file a return showing how they spent all our hard earned money. Not our citizens, nor our media. Though both have enough time to pose with Mudiji and talk about what a simple life he has lived while they float on a yacht together in photo-ops.

EDIT: Thats "130 Crore consumers" not 130, LOL.

I think he just gave example of bitmex.

Okay so if we can't withdraw to out bank account then how can we convert out crypto to fiat on Bitmex?
If we have to do crypto to crypto then their are numerous exchanges.

Yes. No. No.

Is Bitmex legitimate exchange? Is it Indian exchange? Can we withdraw funds to bank from Bitmex

Formalized structure for Crypto Market? That is next to impossible thing to do. Pseudo-anonymity is the inherited characteristic of cryptocurrency just like cash which is anonymous as well. Government can make laws, give guidelines and ban certain type of crypto use cases similar to cash but cannot entirely formalize the crypto market and get the record of every transaction (government has to let that sink in). As in the case of cash, government has given several guidelines like restricting businesses to pay more than Rs. 10,000 to single party in a day, requiring PAN if person deposits more than Rs. 50,000 in a bank, etc etc.

The same can be done for BTC too. So, if person moves BTC through mixers, hide transactions or doesn't pay tax, it's on him. I can spend cash in whichever way I like, I can sell my house for Rs. 50,00,000 in cash and get away with it without paying tax due to the anonymity cash provides me. But that doesn't mean it's legal. Same applies to BTC as well. So, it's the duty of person to pay appropriate taxes on BTC (like cash income), government can't do anything about it no matter how much it tries. And if government think banning cryptocurrencies is the solution, it better be ready to ban cash as well.

Now with BTC reaching 20K+ this is sort of expected but the greater challenge in front of the tax authorities themselves would be lack of laws. From my personal experience and the types of conditions that are going on in the country currently, there is no chance that a crypto law would come into reality for at least a year or two (unless obviously govt. decides to create Anarchy in another sector). Now without laws tax authorities would be more or less bewildered while making assessments. There are no precedents or judgments so there is going to be complete harassment of assessees.

Every one of us knows that taxes are inevitable and obviously we are paying it but the problem of taxation without law is that it's not necessary you get a notice only if you withdraw money. I mean one may even get a notice if he has sold his bitcoin but the BTC is in the wallet/exchange itself. Moreover, the KYC that the exchanges have to do is also not formalized anywhere in any law. It's just a general practice which they do. So the major question is up to what extent the information is being shared with the authorities. There are many questions that are pretty much unanswered.

For Crypto Tax to be easy the crypto market should have a formalized and easy structure. Imagine the difficulty the government would face when someone has his BTC in private key wallets where no one can know about it while other person has it on his exchange.

Moreover, Imagine a situation there are 2 person. Both deposited Rs. 100,000
 on WazirX let's say in which you have to do KYC. Now person "A" decides to take the money to BITMEX which does not has KYC in India. Now he can buy sell unlimited quantities on Bitmex and Indian authorities would never know how much he gained. While person "B" trades on WazirX and even a single sell transaction made by him would be subject to Capital gains. Moreover the bigger problem is sending money abroad. There would be a big evasion of tax this way as Income which has to be taxed in India will go outside without levy of Tax.
 

Yes but I am hearing all the negative things about the crypto bill current government intend to pass. I am afraid if they will impose blanket ban on cryptos

I have been paying taxes on my crypto earnings since 2016 so I am OK too! However, I have been paying taxes on the basis of my other salary and business income as there was no specific regulations around cryptocurrencies in India. Let's hope they will come out with some proper guidelines around it. It will help us to get a clear understanding on how we should be filling our taxes. That is important!


Wow! What for?? Crypto is skyrocketing for a good reason now so this bull run is very different than of 2017. My personal feelings is that, it is a good time to continue HODLing. The market signs are very positive!

I want to cash out all my crypto holdings. I will be happy if some regulation or clear guidelines are introduced by Government.

Like I said in this post: https://bitcointalksearch.org/topic/m.55775907, even if government decides to specifically issue guidelines for crypto taxation, it won't charge flat 30% tax from every individual who earns from cryptocurrency.

The writer of Coindesk article has misled the readers with this line:
"Some experts are anticipating a 30% tax on cryptocurrency gains and many are advising their clients to file bitcoin returns as capital gains, which are associated with stocks, according to the article. "

Maximum flat tax rate on capital gains in India right now is 20%. 30% is only charged in case of progressive income i.e. if you are earning very high income but even then long-term capital gain isn't included in progressive taxation system in India. So, 30% for every crypto income is quite misleading.

About your other question - NO, you don't have to pay tax if your total income inclusive of crypto earnings is below taxable limit. Current taxable limit is Rs. 2,50,000, if your total income is below that then no tax. Moreover, your tax payable would still be zero if you are earning upto Rs. 5,00,000 from all sources due to rebate of Section 87A. However, you will have to file income tax return of NIL tax in this case.

Exactly! If government is planning to tax the income from trading cryptocurrencies it means they won't ban it or declare it illegal.
That's a good news. But yeah, I know it might not sound that good to pay 30% of the income as a tax.

Besides that one thing I would like to ask is what if the annual income is not under the taxable bracket ?
Would the government still tax the income from cryptocurrencies ?

What's say @webtricks ?

But isn't it good because this will regulate crypto trading to some extent?

I'm ok with paying tax, hoping they would make calculating crypto tax bit easier though.

Yeah! This is the most appropriate thing authorities can and should do.

Exchanges are meant to buy and sell cryptocurrencies for fiat (Indian Rupees here). Whenever a company is dealing in Indian rupees, it has to comply with the conditions of using the currency.

In India, financial organisations are required to ask from PAN card for all of their clients. PAN Card is a single identification number which is used to track all financial transactions of an individual and more importantly stop any kind of tax invasion.

Whenever, a new liquidity is injected in the economy by individuals/companies, it is subject to taxation. So if I bought btc for Rs. 10,00,000 and sold for Rs. 15,00,000, I am injecting Rs. 5L in the economy which is subject to taxation. There is nothing wrong if authorities ask data from Exchanges and hunt down the defaulters themselves if people aren't paying taxes.

If someone wanna avoid taxes, the first thing you should do is stop using exchange at all. Buy btc from p2p exchange or other OTC medium, use non-custodial wallets. Use bitcoins in complete anonymity or pay tax, as simple as that!

I somewhat knew that these would be coming to us in future but didn't expect that fast! Read this,



Main news reference: https://economictimes.indiatimes.com/markets/stocks/news/indian-taxman-comes-sniffing-as-bitcoin-hits-an-all-time-high/articleshow/79533401.cms
2nd News reference: https://www.coindesk.com/india-plans-to-tax-income-from-bitcoin-investments-report

So government can legally ask the Indian crypto exchanges to share their user's data to understand who is making what kind of money and can demand as much as 30% tax from them. While it's not official yet, but it's not impossible! Do you have a KYC verified account with any Indian crypto exchanges and have withdrawn money in last few months? Prepare to hear from the tax authority!