Bitcoin, ETFs and taxes

[pawanjain]

I was just going through ETF taxes and that's when this crossed my mind.
Currently bitcoin has a flat tax slab of 30% which we can't escape legally.
But what if we buy and hold/trade bitcoin ETF as per our individual needs to avoid the huge tax burden.
For people who know they are just holding bitcoin for monetary gains and will be selling it in the future or trading on daily basis, they can use this option.

Currently we have the option to buy bitcoin ETFs only through platforms like INDmoney, Vested Finance etc...
Bitcoin ETFs in India are classified as unlisted foreign securities for Indian tax purposes.
They are currently taxed under our Income Tax slab for STCG if held for less than 24 months and for LTCG its a flat 12.5% tax on the gains.
So instead of paying the 30% flat tax on bitcoin gains isn't it better to pay 12.5% instead under LTCG ?
For STCG depending on the annual income there would be 0 tax if annual income is under 12 lakhs and respectively according to the tax slabs.
But yeah, one disadvantage of this option is that margin trading, leverage and short selling is prohibited from RBI under the Liberalised Remittance Scheme (LRS).

This is strictly for those people who wants monetary gains from bitcoin investment.
This not for those who wants to hold the keys to their bitcoins.
Spill your thoughts below.

[Bitcoin Smith]

I got into an endless discussion on a Reddit thread a while back with the same subject and yeah, it can save us taxes and we can even pay zero tax legally if we choose to hold bitcoin etfs instead of the real bitcoin. But then I ended my argument with I am not here only for the monetary gains and bitcoin ETFs are not real bitcoin so I am going to stick with bitcoin alone no matter what.

I guess this is government trick us into buy some paper and giving an illusion that it has the same exact value but after centuries, we realize that that is not, I don't want the same thing to happen with bitcoin as well.

[pawanjain]

I got into an endless discussion on a Reddit thread a while back with the same subject and yeah, it can save us taxes and we can even pay zero tax legally if we choose to hold bitcoin etfs instead of the real bitcoin. But then I ended my argument with I am not here only for the monetary gains and bitcoin ETFs are not real bitcoin so I am going to stick with bitcoin alone no matter what.

I guess this is government trick us into buy some paper and giving an illusion that it has the same exact value but after centuries, we realize that that is not, I don't want the same thing to happen with bitcoin as well.

Absolutely. May be the government wants us to perceive this option since many people are just here for the gains.
There are lesser people who actually just want to hold bitcoin because the fiat system is fully flawed.
But as more people realize this fact, they will prefer holding bitcoin instead of going for bitcoin ETFs for the gains alone.

[Bitcoin Smith]

I got into an endless discussion on a Reddit thread a while back with the same subject and yeah, it can save us taxes and we can even pay zero tax legally if we choose to hold bitcoin etfs instead of the real bitcoin. But then I ended my argument with I am not here only for the monetary gains and bitcoin ETFs are not real bitcoin so I am going to stick with bitcoin alone no matter what.

I guess this is government trick us into buy some paper and giving an illusion that it has the same exact value but after centuries, we realize that that is not, I don't want the same thing to happen with bitcoin as well.

Absolutely. May be the government wants us to perceive this option since many people are just here for the gains.
There are lesser people who actually just want to hold bitcoin because the fiat system is fully flawed.
But as more people realize this fact, they will prefer holding bitcoin instead of going for bitcoin ETFs for the gains alone.

Holding something that doesn't have the real value of the assumed asset and over the decades, it will be the norm and people will keep on using the ETF instead of real bitcoin while rich and government will take complete control over most of the bitcoin at that time. That is why as a part of bitcoin community we should not let this happen, just keep holding bitcoin gives us lesser returns but on the longer run it also ensure that bitcoin stays.