2.4 What is Bitcoin ₿?

Bitcoin (BTC) is the first and most widely recognized decentralized cryptocurrency.

Feature	Explanation
Identity	A form of digital money invented in 2008 by an unknown entity named Satoshi Nakamoto.
Decentralization	It is not controlled by any single person, bank, or government. It operates on a global network of computers.
Technology	It is secured by Blockchain technology, a public, tamper-proof, and distributed ledger that records all transactions.
Goal	To act as a peer-to-peer electronic cash system, enabling direct transfers between two parties without a financial intermediary.
Supply	Its total supply is capped at 21 million coins, making it scarce and often viewed as a store of value (digital gold).

Is Bitcoin Legal in India?

Yes, Bitcoin is legal to buy, sell, and hold in India, but it is not considered legal tender (official currency).

Here is the current regulatory status:

Trading is Legal: The Supreme Court of India overturned the RBI’s banking ban on cryptocurrencies in 2020, allowing exchanges and trading to operate.
Not Legal Tender: Bitcoin is not recognized as a currency (like the Indian Rupee) that can be used for everyday transactions.
Official Classification: The government classifies Bitcoin and other digital assets as Virtual Digital Assets (VDAs) under the Income Tax Act.

The Indian government has established a strict tax framework for VDAs, confirming its regulated status:

Flat Tax: Profits from the transfer of VDAs are subject to a 30% tax rate.
TDS: A 1% Tax Deducted at Source (TDS) is mandated on most transactions involving VDAs.
Regulatory Monitoring: All domestic and offshore crypto exchanges serving Indian users must register with the Financial Intelligence Unit (FIU-IND) and comply with KYC/AML regulations.