Cryptocurrency Mining Legal Illegal In India Tax Earning Problem Hurdle Reward Mudrex Unocoin Ceo Edul Patel Sathvik Vishwanath

New Delhi: Cryptocurrency mining, as the name implies, is the process of creating new cryptocurrencies in circulation. A highly competitive process, cryptographic mining uses a working test method to verify and add new transactions to the blockchain. Since cryptography itself is still a mystical topic for many, it is understandable that users may have many questions about cryptographic mining. An important question among them is: Is cryptographic mining legal in India? And perhaps most importantly, is it profitable as a profession? ABP Live spoke with Mudrex CEO and co-founder Edul Patel and Unocoin CEO and co-founder Sathvik Vishwanath by email to discover the different facets of cryptocurrency mining. Founded in 2018, Mudrex is a Y Combinator-supported platform for automated cryptocurrency trading. Unocoin, meanwhile, was founded in 2013 and claims to be India’s largest participant in the Bitcoin space.

Is cryptocurrency mining legal in India?

In India, cryptocurrency Mining is an unregulated process at the moment, Patel told ABP Live. “There are no regulations prohibiting people from mining cryptocurrencies. As of now, since public crypts are extracted using the miners ’own resources, there are no laws designed for this process.

Cryptocurrency mining is legal in several countries around the world, including Canada, El Salvador, and the United States. Also in India, cryptocurrency mining is not yet considered illegal. However, it is taxable.

Vishwanath told ABP Live: “It is one of the activities in which people use their processing power and electricity to process cryptographic transactions and get rewards for them. It is a taxable event and not quite profitable due to the general average temperature of India, so we do not see many such activities here.

Need permission to mine cryptocurrencies in India?

No, you do not need special permission. According to Vishwanath, “No such licenses and permits are required as anyone can start cryptographic mining in India.”To mine cryptocurrencies, all you need is a cryptocurrency wallet, good mining software, and most importantly, a powerful PC.

Patel shared that in March this year, said Finance Minister Pankaj Chaudhary in Parliament that the infrastructure costs required for the operation of Virtual Digital Assets (VDA) would not be considered as acquisition costs, which is not allowed as a deduction under the provisions of the Act.

How Many Taxes Do You Have to Pay to Cryptocurrency in India?

Rewards earned through cryptographic mining will be taxed at 30 percent of total earnings.

Is cryptographic mining profitable? How Much Money Can You Make?

Cryptocurrency mining can be profitable. However, there are certain warnings to keep in mind. Patel explained: “For example, if a Bitcoin miner can successfully extract by adding a block to the blockchain, he will receive 6.25 Bitcoins as a reward. The reward earned in cryptographic mining will be taxed at 30 percent on total earnings.

Vishwanath is also unsure whether cryptographic mining would be profitable for many in India, “…because here electricity, maintenance, rent, and so on. they are quite expensive as mining equipment generates a lot of heat and needs refrigeration, which is an expensive matter in itself.

Patel also suggested that cryptographic mining may not be too sustainable because “it can also shorten the life of the graphics cards that are used.“He also said that most people are afraid to enter cryptographic mining as a profession” because the market is volatile. “

What kind of platform is needed to undermine crypto? Is it easy to acquire such a system in India?

According to Vishwanath, there is no equipment manufacturer in the country that is setting up cryptographic mining platforms in India, mainly because “it is not profitable here anyway”.

He further explained: “These computers are usually supercomputers made of something called Application Specific Integrated Circuit (ASIC) chips that are designed solely to undermine cryptography. Therefore, we will need processors that have such chips built in to make the process possible in a competitive way.

What are the disadvantages of cryptographic mining?

Both Patel and Vishwanath agree that high electricity use is the biggest challenge facing a miner in India.

If we can get cheap electricity for, say, 2 rupees per unit, it can be considered profitable. For one thing, we still don’t have it anywhere. And on the other hand, there are also maintenance costs and data that add up, too.said Vishwanath.

Will cryptographic mining be banned in India in the future?

Cryptographic mining is unlikely to be banned in India,Patel said.

Vishwanath explains cryptographic mining “it is just an activity in which you are processing the transactions that take place in the blockchain and you receive a reward for it … I do not see that there is any illegal activity in terms of mining and it is not possible to perform any activity illegal. activity too, it is only about who uses their computers and is paid for the effort, power and variable cost that are added.

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