In India, the popularity of cryptocurrencies such as BitCoin is growing. However, the situation has changed recently because several sorts of uncertainty may begin in the current fiscal year 2022–23. From today until the end of the fiscal year 2023, a flat 30% tax will be levied on revenue received from cryptocurrency investments, but it does not yet have legal validity. Aside from that, a 1% TDS on crypto transactions can have an impact on investor sentiment. In the face of this uncertainty, it’s critical to consider a few things before investing in crypto, so that losses are minimised. Experts have recommended that it be kept at a maximum of 5%.
Do not invest without first considering your options.
If you invest money in an asset about which you don’t have enough understanding, you could lose a lot of money. If you wish to invest in a crypto asset, you must first learn everything there is to know about it. Only invest in a cryptocurrency if you believe it has a higher potential for growth. According to Dilip Seinberg, Founder and CEO of Blockchain Development Company ThinkChain, understanding the crypto project’s technology and how it operates is critical. If you’re having problems grasping this, seek the advice of a trusted advisor.
Spending too much money is not a good idea.
Even if you have a good understanding of a crypto asset, don’t put any additional money into it. The crypto tax of 30% and 1% TDS, according to Yash Upadhyay, Strategy Head, IIFL Group, has lowered the appeal of crypto assets. Aside from that, there is uncertainty about future government initiatives in this area. As a result, Yash believes that now is not the best moment to put more money into it. Apart from that, according to Anmol Gupta, founder of 7Prosper Financial Planners, investing in crypto is riskier than investing in small-cap companies; thus, in the current climate, he would not propose considering crypto as a long-term investment in more than 5% of the portfolio.
long-term investment
According to experts, a TDS of 1% on crypto transactions is a negative for the crypto investment trend. According to Gupta, in such a case, it is advisable to invest in solid tokens and, rather than investing for the short term, to invest for the long term, such as 5–10 years.
Keep your cryptocurrency in a secure location.
If you aren’t trading, it’s preferable to keep your cryptocurrency in a secure location. Keep crypto in hardware wallets, for example, while investing for the long run. According to Sharat Chandra, vice president (research) of EarthID, a blockchain-based identity management platform, self-hosted, non-custodial wallets are the safest place to hold them. According to Chandra, it is preferable to keep the key to digital assets with you.
