Crypto Mining legal in India, know what the law says
There are many discussions going on about the legal status of Crypto Mining in India. Is mining legal? Is any permission required for this and how is tax levied on the income generated from it? So let us know, what is the legal status of crypto mining in India and what are the major challenges associated with it. If you want to know about what is Crypto Mining Machine, then you can know by visiting the given link
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Tax and Regulation
The government is definitely keeping an eye on income from crypto. According to the Finance Act 2022, a 30% flat tax is applicable on income from virtual digital assets (VDAs). Apart from this, if you do any crypto transaction, then 1% TDS (Tax Deducted at Source) also has to be paid.Crypto is still not recognized as a legal tender in India, which means you cannot use it as payment for goods or services, but trading and crypto mining are not prohibited.
What does the Indian law say about Crypto Mining?
There is currently no clear law in India that declares crypto mining illegal. That is, technically crypto mining is legal. One does not need any special permission from the Indian government to mine Bitcoin or other cryptocurrencies.Ambiguity in the law
No specific guidelines have been issued by the Government of India regarding Crypto Mining so far. However, under the Income Tax Act 1961, if you make any profit from Crypto Mining, it is necessary to declare it as "business income" or "other income".
Under Section 55 of the Indian Constitution, if an asset is self-generated (such as a coin made from crypto mining), its cost is determined in a special way. This means that crypto obtained from mining is taxable, but its production cannot be called illegal.Is Crypto Mining Practical?
While Crypto Mining is legal in India, its practicality is questionable. Crypto Mining requires high quality hardware, fast internet, continuous electricity and a cool environment. In India, the electricity cost is high and the temperature is also high, which leads to extra expenses on the cooling system.
This is the reason why Crypto Mining is more practical in countries like China, America and Europe, because renewable energy is cheap and easily available there.