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Currently, the cryptocurrency market in India is struggling with numerous tax rules. Firstly, a 30% tax rate is imposed on cryptocurrencies since the start of April and a further 1% TDS is levied since July 1st. The new taxation has already taken a toll on crypto investors' confidence and there has been quite a decline in trading volumes. However, in a major relief to crypto investors, they can invest in cryptocurrencies without paying any tax deducted at source (TDS) on their investment. The answer to their solution of enjoying the crypto market - is a Systematic Investment Plan (SIP). India's leading cryptocurrency exchange and largest crypto SIP platform Bitbns, on Tuesday, introduced a new tax shield. Under the new launch, an investor will have zero TDS on their SIP investments in cryptocurrencies.
Bitbns initiative aims to remove the taxation burden from the back of the investors whilst encouraging them to undertake SIP to leverage the benefits of rupee cost averaging to counter volatility.
The exchange's Bitdroplet is allowing investors to invest in cryptocurrencies via SIP in a simplified and secure manner. It also provides a one-of-a-kind investment calculator, wherein investors can calculate the value of their SIP investments for suitable investment tenures.
According to Bitbns statement, investors availing of SIP for a minimum period of 12 months can now invest seamlessly without worrying about paying the TDS. While there is no minimum tenure for redemption, Bitbns will bear the TDS for SIP investments redeemed after 12 months. The platform pioneered crypto SIP in India is also the country's largest SIP platform, with active folios over 200,000. The exchange also announced the introduction of 19 new tokens on its SIP platform, delivering investors greater flexibility in their SIP investments.
Gaurav Dahake, Founder & CEO, Bitbns, “Bitbns strongly believes in innovating and building new lucrative product opportunities for its investors, and we are delighted to introduce TDS-free SIP plans for our customers. We believe it is a great time for investors to avail the 'Buy at Dip' strategy and thereby maximize their profits. A SIP approach would be ideal as it is one of the best and most efficient investment strategies. Regular and timely purchases enable an investor to avail a better price point for entry even amid high volatility."
"Our TDS-free SIP plans will encourage investors to avail the benefits of an efficient wealth creation model while evading the burden of TDS. In addition to risk mitigation, it will also aid in portfolio diversification and reinvestment of returns, to leverage the power of compounding and generate attractive yields through long-term lock-in of investments," Dahake added.
Just like SIPs in mutual funds, the crypto SIP also enables an investor to invest a fixed amount in crypto at regular intervals. Investors can avail themselves of daily, weekly, or monthly instalments based on one's investment appetite.
Investment in crypto SIP can begin from as low as ₹75 while automating and scheduling regular purchases of popular crypto-assets such as Bitcoin and Ethereum, among others.
SIP investments in regular intervals allow users to avail of better price points, thereby benefiting from rupee-cost averaging to counter market volatility and mitigate risks over time. Thus, compounded yields would allow investors to build wealth efficiently through long-term investments.
Also, through the SIP route, investors can diversify their capital investment instead of making a lump sum purchase, thus mitigating risks further.
All cryptocurrency transactions will attract 1% TDS with effect from July 1. While the TDS in direct selling will be borne entirely by the seller, in the case of trading one cryptocurrency for another, TDS will be taxed upon both the parties involved.