Topic: FAQs Regarding Bitcoin's Status in India | Newbie's guide (Read 400 times)

Even if it is not in T&C you all have connected your PAN cards with them and any private company wouldn't make a mistake of rejecting the request of sharing data with Government but as I already mentioned in the thread tax evasion would always be conisdered as a crime even if you earn your income through gambling or extortion no matter what. CBDT is always pro revenue. They won't judge you for the deed you did to make that income but would not forget to charge tax on that Income.

I doubt they were 'forced', most of times they make it clear in TnC that your data can be shared for legal reasons.

This is another scenario where exchanges are forced to give their data to these people and not what I was talking about.
There is no other way out and nothing can be done in this case. I guess this is why they say not to use centralized exchanges and use p2p channels to trade.

I was out of merits last time I saw this thread. It is pretty informative thread. Nice work!

It's obvious that if you'd be raided, you'd either try to settle things down the roof by trying to bribe the officials (not the higher ones but those who come to raid you), or you'd just show all the details to get your side safe while fucking the privacy of all those who trusted you while dealing with you. This actually kills TRUST between people and big institutions, but the problem here is, after these consequences such people (who believe they were betrayed) go and try their hands on direct P2P trading where the chances of being scammed are relatively higher than being scammed while dealing over an exchange. And when it's crypto which caught a lot of heat not just as a talkative debate but an extremely trending topic being discussed in a country, it was obvious that the raids were going to be conducted. Still, these are not just exchanges but their own finances too which gave these raid guys a clue about their possible dealings in crypto.

December 14, 2017: Income Tax department conducts raids at nine Bitcoin exchanges across India

Feb 9, 2018: India’s Tax Department Is Sending Notices to Crypto Investors

Can you please connect the dots?

If that's the case then I think it's wrong because it clearly indicates that the exchanges are selling user data to banks.
I don't think this must be the case because by doing this, exchanges are losing their own customers so why would they do something resulting in their own losses ?
Despite all of this, if exchanges are selling user data to banks then it's better we stay away from such exchanges.


If such a scenario occurs then there will surely be a panic in the market and there will be many selling bitcoins for cheaper price.
This might actually be a good time to buy bitcoins for cheaper price but lets keep that aside and assume you desperately want to sell your coins.
There are a few options that would be feasible to use and they are

Use peer to peer channels
Sell bitcoins for hard cash if someone is willing to buy them
Sell bitcoins for tether (USDT) and cashout them to paypal, skrill, payoneer etc.. if you have registered with them already
Use online sources to buy gift vouchers via bitcoin
Use bitcoins to buy things online or ask somebody else to purchase things for you online and pay them in bitcoin
Use the marketplace to purchase things in bitcoin

The last option would be to patiently wait until the heat of the moment is passed and hold your coins until a better opportunity to sell arrives rather than selling in huge losses.

The problem here is that, we are ourselves scared, and even if we aren't, we are feared up hard like it's us who committed the crime itself and we're the only suspect, we're the one accused and we'll only be put behind the bars. So, when seeing that Police, who are given the utter authority to serve for the security and welfare of public, are showing their true colors this way; then at that time, I thought that there's none here left to help me out and I took the loss as it is and moved on. The problem here was, I was alone here and not a group of people who got scammed from a Ponzi called bitcoinnect and that scam was big enough to give these bastards the "masala" they always look for in order to do anything against a thing they don't even know about, but are forced to dislike it.

You should contacted cyber crime headquarters not the police station where they have no knowledge about anything.

Actually there are some laws available in India as well against bitcoin or crypto related scams.

Yeah, but drug dealings have their own limitations because it includes manual intervention there and even if a single clue gets touched by the hands of officials, it can clear up the complex kink and get many big dealers under the radar (except in cases where Tor, Dark web and other dark resources are used with utter care). Same is the case with Bitcoins that -

i. when used through many addresses rather than sticking to a single address
ii. not revealing that you have any crypto in your possession
iii. using VPN resources which would never reveal your private sessions
iv. set up a channel (not speaking about LN) outside your country and use an app like telegram in order to contact your dealers

Can really save you from bad consequences while keeping you outside the radar of Gov Officials.

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Trust me, from what I've experienced and even personally heard, they used to give a reply like - "Arre bhaisahab, agar hum itne padhe likhe aur technologically sound hote, to Police me thode hi hote, yaha m**vane me hume koi maza nahi aata. Ye Bitcoin shitcoin humari samajh ke bahar hai, agli base aana mat warna tumhe hi andar kar denge." This happened to me when I was scammed by a Localbitcoins trader who didn't send me the money after me sending him the money first. That was a stupid mistake by me in early 2017 and I caught ears not to go to Police ever to get anything resolved. 

Yeah, same is the case of drugs. Drugs are illegal, but there is reasonable demand for it. And if you have the right contacts, you can deal them until you get caught 
Please note that I'm not comparing Drugs with Crypto, but if anything is banned by the Govt, whether it has huge demand or not, dealing with them is illegal as per law and will be punished accordingly, if caught (punishment can be evaded in India  ).
If you are asking whether I'll be quitting crypto just because of a ban, no I am not.

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Sorry OP for being offtopic.

Isn't it true that whichever country's citizenship is held by you doesn't matter in crypto even if it gets illegalized and banned here in our country or anywhere? People still need people who are interested in buying it and give you its worth and if you have them, that's it. You can simply sell your Bitcoins to someone sitting in Spain and ask him to send you the money through any freelancing websites via posting a project there and hiring you. That'll be the best way for anybody (except for those who trade higher amounts like 10-100 BTC and even 500 BTC on a daily basis). But those who trade such big amounts of BTC have already spread their business to a level that they've kept their safe side even if crypto gets banned here.

If India bans crypto, then dealing cryptos in India will be illegal even if you hold an Estonian e-residency card.  But you can cash out your crypto in Estonia, I guess (but I am not sure about it). Maybe 100bitcoin can throw some light on his suggestion.

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Yeah, it sure is off-topic. Anyhow, I don't have issues with you holding an OCI card  And I honestly don't care about the benefits you get from the Canadian Government, I am not here to debate which Government is offering better perks. I just wanted to make clear that your claim is false regarding dual-citizenship. That's why I keep reiterating that the Indian Constitution doesn't allow dual-citizenship.

You can find the privileges and restrictions for OCI here

Thanks for clearing up the things.

But it will be legal to trade crypto currency when we are an citizen of India if India completely bans cryptos even if we got the eresidency like mentioned before?

I am sorry for derailing the topic, i am sorry what rights are you talking about, i am a NRI for years and when i return to India what benefit i will be getting from the government, 1000 INR per month as pension and that too every 3 to 4 months you will get that in your account, no health benefits and what rights are you talking about, casting a vote  .  I am getting all the benefits of the Canadian government as i am a tax paying citizen here and the pension is around $1000 CAD per month and i have all the health benefits as well, what benefits the government offers in India for all the retired citizens after paying all the taxes, can you explain that to me.

Once again, the Indian Constitution doesn't allow dual citizenship. If you are a citizen of India, you can vote, but in your case, you can't. The same goes for People of Indian Origin (PIO). While a PIO can't stay here indefinitely, an OCI can stay indefinitely in India. But an OCI cannot claim the rights of an Indian citizen. An OCI status acknowledges that you are an Indian by giving you residential rights but it doesn't acknowledge you as a citizen because you are Overseas citizen.

There is an option called Overseas Citizen of India and i hold dual citizenship and having two passports, i migrated to Canada and i am having Indian and Canadian passport and citizenship, so the idea of it is not possible is not entirely true, but according to constitutional rights i am not an Indian citizen as i am not able to cast a vote but i have life long multiple entry visa to India, so technically i might not be Indian but i can do everything i was doing earlier and i can settle back to India and still earn the Canadian pension and perks .

You mixing up the terms citizenship and residency. Indian Constitution doesn't allow dual-citizenship. But you can have residency anywhere in the world. Just because you are residing/ having a residency in a country doesn't mean that you are a citizen of that country. Many Billionaires have residency in several countries, which doesn't affect their citizenship in anyway.

SO its like moving our nationality from India to estonia or just for the business purpose?

If we still get double residency as per India its illegal so how could we make this happening from India.

You should understand no individual can stop the use of Bitcoin as it is a community powered crypto and all of its value depends on the demand and supply. So if the community is there, demand is sure to be and the usage will never be banned. So, no need to worry you can cash out Bitcoins in multiple ways even if its made illegal.

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Yes you can. Just contact the trader and inform him accordingly.

https://e-resident.gov.ee/

https://en.wikipedia.org/wiki/E-Residency_of_Estonia

Sorry, I don't get it.

Apart from mention of Crypto in remarks, bank can also get customer data from exchanges directly or indirectly (through agencies). This is why it is better to avoid centralized KYC exchanges for FIAT to Crypto conversion or vice versa. Exchanges like HodlHodl.com, LocalEthereum.com and local.Bitcoin.com enables one to trade without providing KYC to a centralized repository.


Creating an Estonian identity and operating under that identity would be the most legal option IMHO.

Its simple and good for any one who is new to cryptos and seeking these answers.

But I have a question to ask to community,let's assume bitcoin was made illegal overnight then what could be the best way to cashout bitcoins?

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Can we use localbitcoin via western union or money transfer from another country traders?

I have come across a lot of people who are pretty much confused regarding the legal status of Cryptocurrencies in India. Most of this confusion came after the RBI restricting banks from dealing in cryptocurrencies. Followed by certain websites claiming that Bitcoin ban Bill is arriving soon. But I would like to clear all those questions in the most concise manner possible.

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Ques 1: Is Bitcoin Banned in India?
Ans 1: No Bitcoin is not Banned in India. Banned as per literal meaning means prohibited from use. So it's not prohibited from use.

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Ques 2: Is Bitcoin Legal in India?
Ans 2: Yes, it's legal but basically due to absence of any Law. For Example, Until the enforcement of Information Technologies Act, 2000 even hacking could have been considered Legal as there were no laws guiding it.

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Ques 3: If bitcoin is not banned then why RBI banned it or what did RBI do?
Ans 3: RBI is financial Regulator of the Country. Bitcoin maybe considered as a financial asset but it's actually a technology beneath. So it's circulation and usage would fall under purview of Government and not RBI. RBI merely asked the Banks to completely stay away from Crypto Dealings. This means RBI enforced the Banks and not the people to:
1. Stay away from Exchanges dealing in Cryptocurrency.
2. Avoid Transactions which are in relation with flow of Cryptocurrency.
3. Not provide any services relating to Cryptocurrencies.

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Ques 4: This means I can purchase and sell bitcoins through banks and Won't be jailed or penalized
Ans 4: Yes, no one can touch you for merely dealing in cryptocurrencies until there comes a law governing it. Now, this doesn't mean you can take contract of murder in payment of cryptocurrencies because you still be charged for murder. I mean using cryptocurrencies for legal purposes.

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Ques 5: If RBI hasn't ban cryptocurrencies why was my Bank Account freezed when I used it for crypto transaction
Ans 5: It's because banks are liable to avoid any such transactions and if you do such transactions banks would try to stop them. But you are pretty good to go until you not mention Crypto anywhere in Remarks. Even if you mention there are pretty less chances that someone is going to notice any such thing. Moreover, I have seen just like 5 out of 100 people facing such an issue so try changing to some private bank.

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Ques 6: Does this means if I my cryptocurrency are stolen Police won't do anything?
Ans 6: The truth is that Police has the responsibility to find out anything stolen from you which is valuable to you and valuable in General. But considering the practical image of Police, you might have a really hard time complaining and finding out any stolen cryptocurrency so obviously TRADE with CARE.

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Ques 7: If cryptocurrency doesn't has any law does this means I don't have to pay tax on it?
Ans 7: The objective answer to this is that you Still have to pay taxes on any earned income in cryptocurrency. Because the mode or medium of earning such income is not of any importance to Income tax. Even the incomes not received yet are taxed pretty much normally. So you won't be able to evade taxes with it. But to save taxes, it is a pretty large discussion for a separate thread.

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Ques 8: Is Indian government deciding to Ban Bitcoin and cryptocurrencies?
Ans 8: This is a mere speculation going on since three years. A few ministers have given some indications that they might do so. But no one still knows if this is going to happen. There are no details of this Act made Public. Everything going around the web that it has banned or 90 days will be given to clear of everything is a hoax as of now.

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Ques 9: What if I am still holding cryptocurrencies and government bans Bitcoin will I lose Everything?
Ans 9: I personally feel that Government would give some time to people to get out of the mess. Still as there is nothing public on it may ban it immediately. No one knows how things would go so obviously TRADE with CARE.


I think I have pretty much answered all the basic questions. But if someone still has any other question I would add them by editing this thread itself and answer them.