How to do bitcoin arbitrage in india
This should allow us a good profit margin to buy in International exchange and sell in India. Check out the below comparison between buy at Intl market Bitfinex and sell at Indian market here Coinsecure. But this is not without hurdles. Till the time of writing, I could not do this yet. The problem is on both sides. In Intl exchanges, its the verification delay, and some exchanges like bitfinex freezing wire deposits. It took about a month almost to properly get verified and ready for wire transfer.
These are all OK. You see, the main problem is in the Indian side. Due to money laundering fears, the outward remittances are too much restricted in India for wire transfer. Approach any 3rd party services or banks, they always ask you the purpose and it is expected to be some of the following: Here is the link. But we do not know yet if bitcoin could fit there.
And not many government netas the term we used to call because they feel themselves very superior to common citizen , are aware or too afraid of the same. Drop the term bitcoin as purpose, and they would stare at you like a criminal. This is a bane in India. It implies that there may be usage of foreign exchange. Let me reiterate my earlier views on this issue in response to another similar query.
There is no specific provision prohibiting foreign exchange transactions for the purpose of bitcoin dealings. You may refer to the following link: Thus you are acquiring bitcoins as moveable asset and not as a currency that can be used as a legal tender for the monetary transactions. However, as there is spurt in the trading of Bitcoins, RBI has been cautioning the investors about the risks involved. You may also like to go through the latest advisory of the RBI at the following link: The increased volumes in the trading in bitcoins has already attracted the attention of the regulators and the Income Tax Dept in India has issued to notices to thousands of traders.
You may be interested in knowing more about it at the following link: So keep proper records of the transactions for submission to the Income Tax Dept, if required. As regards the income tax, as the arbitrage transactions are likely to be regular operations, the income on such arbitrage transactions will be treated as business income and assessed accordingly.
Hi The transactions in bitcoins can be taxed as: Business income, or 2. Capital Gains Depending upon the frequency of transactions.
Please consult a FEMA expert for issues regarding transfer of funds. Hello, It will be treated as business profits and chargeable as per your slab rate.
Trust this clarifies your query.