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Gifting ‘crypto’ this Diwali; how crypto is the new favourite

21 Oct , 2022   By : Monika Singh

Gifting ‘crypto’ this Diwali; how crypto is the new favourite

As more and more youngsters continue to invest in digital assets and currencies, there is no doubt that it has gained much traction. For instance, The International Criminal Police Organisatioin aka Interpol recently created a special task force to monitor crypto-related crimes. At the same time, youth has invested with an aim to gift cryptocurrencies, non-fungible tokens (NFTs), and other virtual digital assets (VDAs), this festive season. “Bitcoin was modeled as digital gold and all of us know how much Indians love gold. Crypto could be an ideal choice because we are presenting them with the future. A good investment in crypto can work wonders,” Rajagopal Menon, vice president, marketing, WazirX, a crypto asset company told FE Blockchain.

However, any VDAs gifted shall be taxable in the hands of the recipient under Section 56 (2) of the Income-tax Act, 1961, if the total value of gifts received within a year is greater than Rs 50,000. “Digital currency may be volatile but is considered to be ‘digital gold’ by new-age millennials. Sending stablecoins such as USDT and USDC could be a very stable form of gifting. Bitcoin or Ethereum could also be a very good form of gift as they are currently on the lower side of pricing,” Amanjot Malhotra, Country Head – India, Bitay, a digital asset exchange, said.

According to Bloomberg, bitcoin has the potential to hit $100,000  in 2022 as the digital currency completes its shift from a risk-on to a risk-off asset. “Crypto gift cards can stir up the gifting emotions during the festivities, simultaneously giving higher value for money. Overall, this will support the growth of India’s cryptocurrency industry and the global ecosystem,” Sakina Arsiwala, Co-founder, Taki, a Web3.0-based platform, claimed.

It is to be further to be noted that the Income Tax rules stated that specified moveable properties acquired at a discount will all be regarded as gifts. “ It’s now time for people to not only invest in virtual currencies based on Blockchain technology but to leverage the benefits offered by cryptocurrencies as a gift to others that has gained momentum over the years as a valuable asset,” Arsiwala further explained.

A recent survey by Cointelegraph revealed that among 84 professional investors worldwide, 3.3%, or around $10.42 billion, of the $316 billion in assets managed by the respondents is invested in cryptocurrencies. “Bitcoin has registered a remarkable 100x improvement over gold as a store of value. The world has realised this eminence growth and beginning to reprice digital currency in real-time,” Malhotra added.

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