Bitcoin Forum

hi

I saw this forum and later the india sub-forum and saw that people are trying to buy/sell bitcoins outside of exchanges.
like people asking for currency recharge, flipkart voucher, buying one-to-one with people, buying selling in local bit coins website, etc. I don't understand why people dont use exchanges for this.
is it not better in the eyes of govt if it is done via exchange?

if wanna start bit coin trading, which is better?exchange or directly to person?
I think the advantage of using exchange is govt will know transactions and it is legal (correct?)?
but disadvantage might be because bit coin is not regulated  and it is better to simply deal small amounts out of exchange and such central spots of attention. if we pay tax after buying/selling bit coin outside exchange, it is still legal,correct?

is using local bitcoins website a right way of doing this??

Using bitcoin for daily use like recharges and all makes the bitcoin strong.
I sell bitcoin in person, because I easily get cash for my bitcoins, involving banks for bitcoin transfers can cause you bank account to be seized( see the list of bitcoin hostile banks)

Look at the liquidity and number of transactions done on exchanges in India and you will get your answer.  :)

Black Money. Simple.

this was what I was worried would be the case.is it true? is this why people trade like this outside of exchange?

btw you can still declare income,pay tax even with hard cash, right?how is it black money then?

i don't know where to check. please tell me where.
please also tell me what your finding is from this :)

There is also a factor of fear driving these 'out of exchange' trades - What if the person gets into trouble due to the Governments lack of stance on Bitcoin?

There is also a factor of ignorance driving "out of exchange" trades - What is a government gets into trouble due to the people's lack of understanding on Bitcoin?

Yup, thats for sure.
But that is not the reason for driving 'out of exchange' trades. Should be the reason for the Government to be cautious though.

Goverment are so cautious that no one hear as any idea. Maybe, you should ask you credible contacts who attempted PIL to dig more till they hit Office of Finance Ministry.

Oops! Again, my really really bad assumptions on personal level that hardly keep thread on track.

For me exchanges are just a big PITA. Not to mention i need to go ahead and pay them a transaction fee which is not very small imo currently. Also the hassle of collecting and transferring to my wallet where i incur additional transfer fees.
Exchanges would need you to register KYC information and to be totally honest, my KYC documents are just not in place thanks to our brilliant government who wants to make life difficult for the floating population. With Modi at the helm though, i am starting to see a few changes, so maybe the day will not be far when i actually buy BTC on an exchange!

I am all for paying taxes too, but there is no way the government can fix a tax slab when BTC is so volatile. For heavens sake, they are unable to even arrive to a conclusion on whether BTC is a commodity or a currency! It will be very difficult for them to regulate and i guess that is the whole essence and beauty of BTC, there is no centralization or regulation!

ok, so consider 2 options:-

1. you trade outside exchanges. you give your bank account number to a buyer and sell him bit coins. he *knows* your identity because you gave him a/c number. if the government decided to have a negative stance on bit coin, they would look for active bit coin buyers/sellers and get hold of them and then get other contacts out of them.

2. you trade inside exchange. you give them your identity for KYC.
if the government decided to have a negative stance on bit coin, they would raid exchanges and get your info and contact you.

which option is better?please give me your opinions.


and micky123, bit coin's nature is lost when you convert it to rupees. i am talking about bit coin traders(those who sell/buy bit coins and deal with *rupees*). so i was talking about taxation from a rupees perspective. obviously government can't tax bit coins. it is if i convert it to rupees that i should tell the government about it.

I my opinion as a lawyer it is better to use the exchange as a mode of trading. Mainly because of two reasons-:

1. Trading through exchanges eliminates the risk of getting cheated. there are many people in this forum who have been cheated by one or various persons.

2. If you are trading in white money then it is always to have a paper trail which you can always refer to in case you want it. As I think most of the exchanges would be keeping a record of your transactions.

Now the second party of fear which every normal trader has "What if authorities take an action against us" -: As a lawyer I should save it for telling in my opinions for legal fee but since community as a whole has this issue I would like to tell that no government agency can arrest you for trading in bitcoin. Any regulation which may come in future cannot be in effect with retrospective effect (back dated). So if government bans it on 1.4.2016 (Example only) then any person who traded before 1.4.2016 cannot be incarcerated. Hope this information encourages people to trade in bitcoin without a sword hanging on their head.

Regards
--
Kanishk Agarwal
Advocate
CriTaxCorp
Criminal-Taxation-Corporate
www.critaxcorp.com
+919971666252

Great to have you among us , legal clarity is also needed for clearing all the negativities related to BTC.

Thank you for pitching in and sharing this information. I always had a little bit of a guilt and worry when trading in BTC as it may be subject to Govt. intervention in the future. This bit of information has set my mind at ease. I can now trade in BTC without any fear. Just to counter this possible incursion, every transaction in my BTC wallet has a note attached which explains where the funds come from or to where i send them.  ;D

they hav a chance for having the trade at less cost

Yes, that seems to be point about incarceration.

From the Constitution ,  
(20) Protection in respect of conviction for offences. —(1) No person shall be convicted of any offence except for violation of a law in force at the
time of the commission of the Act charged as an offence, nor be subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence.

(Electronic Page 5 of this file http://lawmin.nic.in/olwing/coi/coi-english/Const.Pock%202Pg.Rom8Fsss%286%29.pdf)

So you may not be convicted for trading in bitcoins now, by the Government bringing in a retrospective law. But can they tax you with retrospective effect? What if they suddenly decide to pass a retrospective law stating that Bitcoin transactions are subject to 100% VAT. Aren't they well within their powers to do this? (I am thinking about the Vodafone case).

Even the vodafone case was decided in favor of Vodafone. Secondly, even if VAT or any other tax is imposed restrospectively (very remote chance) even then the issue of incarceration will not come into effect. Also, if these kind of regulation comes further a timeline will be provided to the traders to pay the taxes without any interest or penalty.

Hope the answer clarifies the doubts in your mind.

Regards
--
Kanishk Agarwal
Advocate
CriTaxCorp
Criminal-Taxation-Corporate
www.critaxcorp.com
+919971666252

Trading bitcoin for cash is easier and no one can track it. I sell btc and money is mine, no banks no shit

I think we are talking about 2 different things. The retrospective law was passed after an existing case was decided in favour of Vodafone. People may not be worried about incarceration, but they could still be concerned about excessive taxes. Excessive taxes (imposed retrospectively) would effectively result in the government seizing your bitcoins (as taxes). :)

I think we are talking about 2 different things. The retrospective law was passed after an existing case was decided in favour of Vodafone. People may not be worried about incarceration, but they could still be concerned about excessive taxes. Excessive taxes (imposed retrospectively) would effectively result in the government seizing your bitcoins (as taxes). :)
[/quote]

Taxation implication in terms of retrospective effect should not happen as retrospective amendment in itself means an amendment in existing provision. I am not suggesting that an retrospective tax implication cannot happen but surely there is a remote probability that it will happen.

There are many formalities to exchange bitcoins in exchanges and also takes time. I prefer to exchange with persons in this forum having high trust.

yes you are absolutely right,people often buy bitcoin for blackmoney and sell them to make it white or keeping for long term investment. in other side exchange gives bitcoin lower than traders but they yet buy from seller because of kyc form is required in almost every exchange.

Went back to 1.5 yrs :o 

True to an extent that is one of the reason and KYC also another hindrance.

Where and how you receive cash?You must sell it to buyer by meeting him in person if you want to avoid bank

some people think that the exchanges could not be used as benchmarks. several exchanges, including exchanges outside will make them to see the exact rates. there will be a comparison of prices for profit.

Well sometimes users prefer to buy/sell outside exchange because some people like to scam here. I have seen many peoples who used to scam for btc<-> inr exchange.
There are some kids who earn btc by ewhoring and by blackhat method. They do not want their money to be transferred to their bank account because when their parents would see it then they could be in trouble.

For me exchange is they best way to buy/sell btc. I have used coinsecure since starting and used zebpay to buy flipkart vouchers.

Buying/Selling by any middle man does not confirms that you will get your btc or inr or any product.