How to Accept Cryptocurrency Payments in India: Top Apps and Tax Guide

Cryptocurrency has rapidly evolved as a revolutionary and alternative digital payment option, offering businesses new opportunities. As its adoption continues to rise, more businesses in India are now exploring ways to accept cryptocurrency payments. In this guide, we will discuss the key aspects of accepting crypto payments, popular payment apps, and the applicable tax regulations.

Why Accept Cryptocurrency Payments?

Accepting cryptocurrency payments can offer several advantages to businesses. Some of the benefits are:

1. Global Reach: Because cryptocurrencies transcend borders, you can readily accept payments from customers worldwide.
2. Reduced Transaction Fees: Unlike traditional payment gateways, which often charge hefty fees, crypto transactions typically cost less.
3. Faster Transactions: Crypto payments settle almost instantly, whereas bank transfers may take several days.
4. Customer Privacy: Unlike conventional banking, crypto payments generally offer users a higher degree of privacy.

How to Accept Cryptocurrency Payments in India

To accept cryptocurrency payments, you will need a reliable on crypto payment gateway. These platforms act as intermediaries, enabling you to receive, process, and settle payments made in various cryptocurrencies.

Step-by-Step Process

1. Select a Payment Gateway: First, choose a platform that aligns with your specific business requirements.
2. Register and Complete KYC: Next, complete the necessary verification processes, as many platforms require Know Your Customer (KYC) checks to comply with local regulations.
3. Integrate the Gateway with Your Website/Store: Then, connect the chosen platform to your online store using APIs, plugins, or direct integrations with popular e-commerce solutions.
4. Start Accepting Payments: Finally, begin sharing payment links or generating QR codes that allow customers to pay with their preferred cryptocurrencies.

Top Apps to Accept Cryptocurrency Payments in India

Several cryptocurrency payment apps make it convenient for Indian businesses to accept digital currencies. Each offers unique features, integrations, and advantages. Consider the following popular options:

1. Coinbase

• Features: Supports multiple cryptocurrencies, including Bitcoin, Ethereum, and Litecoin.
• Integration: Offers hosted checkout pages and invoicing solutions.
• Advantages: Widely recognized and trusted worldwide, it provides an easy onboarding experience.
• Best For: Businesses seeking a global, reputable payment gateway.

2. Blockonomics

• Features: Facilitates payments primarily with Bitcoin and Ethereum.
• Integration: Works seamlessly with WordPress, Shopify, and other e-commerce platforms.
• Advantages: Requires no KYC and allows straightforward payment link creation and order tracking.
• Best For: Small businesses looking for a simple, hassle-free crypto payment solution.

3. CoinGate

• Features: Accepts payments in over 70 cryptocurrencies.
• Integration: Integrates with WooCommerce, Magento, and other major platforms.
• Advantages: Converts crypto payments into fiat currency with relatively low fees.
• Best For: Businesses needing extensive multi-currency support and convenient fiat conversions.

4. BitPay

• Features: Supports payments from over 100 crypto wallets and facilitates direct fiat bank transfers.
• Integration: Works with various e-commerce platforms and offers a versatile API.
• Advantages: Settles funds directly in fiat, thereby mitigating the volatility risks of crypto.
• Best For: Businesses that want to avoid dealing with crypto price fluctuations.

5. Binance Pay

• Features: Accepts payments in over 300 cryptocurrencies with zero fees.
• Integration: Easily accessible within the Binance ecosystem.
• Advantages: Delivers fast, borderless transactions at no additional cost.
• Best For: Businesses already active on Binance or those attracted to zero-fee payments.

Taxes on Cryptocurrency Payments in India

Although accepting cryptocurrency payments is appealing, it is crucial to understand your tax obligations. The Indian government has introduced specific guidelines and tax rates for crypto-related transactions.

Flat 30% Tax on Crypto Gains

• When you sell or convert crypto into fiat currency (INR), you must pay a 30% tax on your profit. The only eligible deduction is the initial cost of acquisition, meaning other expenses like transaction fees do not qualify.
• Example: If you purchase Bitcoin at ₹1,00,000 and sell it at ₹1,50,000, your ₹50,000 profit is taxed at 30%, resulting in a ₹15,000 tax liability.

1% TDS on Crypto Transactions

• For all crypto transactions that exceed ₹50,000 in a financial year, you must account for a 1% TDS (Tax Deducted at Source). This measure helps the government track cryptocurrency transactions and ensure better compliance. As a business, you will deduct this amount at the source and report it accordingly.

Taxation of Crypto Airdrops and Mining Rewards

• If you receive crypto through airdrops, treat the fair market value of the tokens on the date of receipt as income taxable at 30%. Similarly, any mining rewards you earn are also taxed at 30%.

No Set-Off or Carry Forward of Losses

• If you incur losses from selling one cryptocurrency, you cannot offset those losses against profits from another crypto or any other source of income. Moreover, these losses cannot be carried forward to future financial years—an important point to keep in mind when planning your finances.

Compliance and Record-Keeping

Because of the stringent tax regulations, proper record-keeping is essential. Make sure to maintain detailed records of all cryptocurrency transactions, including dates, amounts, and counterparty details. In addition, document your cost of acquisition, as well as any conversions from crypto to INR, ensuring you note the applicable exchange rates and dates. Since tax laws can change, consider consulting a tax professional to remain fully compliant with the latest regulations.

Conclusion

In summary, accepting cryptocurrency payments in India can open up new revenue streams and broaden your customer base. By carefully selecting a payment gateway—such as Coinbase, Blockonomics, CoinGate, BitPay, or Binance Pay—you can seamlessly integrate crypto transactions into your business operations. Furthermore, it is essential to remain compliant with India’s tax laws, which involve a flat 30% tax on crypto gains, 1% TDS on qualifying transactions, and specific rules for crypto losses and airdrops.