What is Bitcoins and How to use Them ? 11 Things to Know About !

1.What is Bitcoin?

Bitcoins are an anonymous, decentralised peer-to-peer payment network that is powered by its users with no central authority or middlemen. In other words, Bitcoin is cash for the internet.

In contrast to older forms of electronic money, no company controls Bitcoin, nor ever could: all the rules about how it works are embedded into the very operation of trade, including the rate of inflation and how to verify transactions.

Bitcoins is the most popular form of cryptocurrency , with number of users expected to reach 4.7 million by 2019. Other kinds include Litecoin, Dogecoin, Peercoin, etc.      

2.Who developed the idea of bitcoins?

The idea of Bitcoin was conceptualised by Satoshi Nakamoto, an anonymous figure. In May 2008, he shared a white paper [PDF] about Bitcoin, a peer-to-peer cryptocurrency.

Without disclosing who he was, Satoshi outlined how the currency would work: bitcoins would be ‘mined’ by computer software, transferred directly amongst users and recorded in an untamperable ledger without the need of a third party.

Then he disappeared.

Part of Bitcoin’s appeal is Satoshi Nakamoto’s anonymity, who many view as a selfless act towards a new era of financial revolution. Online detectives have identified a few candidates, including a real-life Japanese person sharing the same name. Some even theorised that Satoshi Nakamoto is a pseudonym for a collective.

In May 2016, the Bitcoin community was shocked when Australian entrepreneur Craig Wright identified himself as Satoshi Nakamoto. Some people believe his claim, some didn’t, but on the whole the Bitcoin community is unaffected – the Bitcoin ecosystem is decentralised, and cannot be controlled by any person(s), including the creator.

Read : Man buys ₹ 1700 of bitcoin, forgets about them, finds they're now worth ₹ 6 crore

3. How to Use Bitcoins?

Bitcoin can be used for spending, similar to money. Some people also keep them for investment purposes, while others prefer to use them as a method to make international money transfer.

Bitcoin exists electronically and is kept in ‘bitcoin wallets’. There are many types of bitcoin wallets: desktop wallet, mobile wallet, online/web-based wallet, hardware wallet and even paper wallet.

To read more about bitcoin storage, check out this article by CoinDesk. You can have as many wallets and bitcoin addresses (where you receive money from others) as you like.

4.How many people are using bitcoin?

Estimates vary – it is hard to find out the exact number of people who use Bitcoin. One way to measure number of bitcoin users is by measuring the number of bitcoin wallets.

According to CoinDesk’s State of Bitcoin and Blockchain 2016 report, bitcoin wallets doubled to 12.77 million in one year, from the end of 2014 to the end of 2015. Even though many bitcoin users have more than one wallet (it is common to hold a few wallets), this is an indication that the number of bitcoin users worldwide is increasing.

Read : Man buys ₹ 1700 of bitcoin, forgets about them, finds they're now worth ₹ 6 crore

Another way to estimate bitcoin usage is by the number of bitcoin transactions, which has steadily increased. Although this could mean that the same people are simply making more bitcoin transactions, it is fair to assume that there are new bitcoin users in the mix, too.

5.Who's making money from Bitcoin?

People who bought early and sold at the peak. The currency has been through two boom-and-bust cycles, with the cost of one Bitcoin rising from $2 to $30 in 2011, and then from $13 to $266 earlier this year. But having a fortune in Bitcoin is a bit like having a fortune in gold: you have to sell your holdings to really make the most of it.

6.Is it really popular?

Several online firms such as WordPress, Namecheap, Reddit and Flattr are already using Bitcoin. It is a new concept, but it is picking up fast. "At the end of August 2013, the value of all bitcoins in circulation exceeded $ 1.5 billion with millions of dollars worth of bitcoins exchanged daily," according to bitcoin.org. A few small physical stores are also accepting the digital currency.

7.How do I acquire bitcoins?

There are three main ways to get bitcoins: mine them, buy them, or work for them.

Bitcoin Mining

Bitcoin mining used to be really profitable. However at the current time it is no longer cost effective for the average individual. One will need to buy specialised Bitcoin mining equipment, get/rent dedicated spaces for them, and pay their associated costs (rental, electricity and cooling costs).

Buy Bitcoins

You can buy bitcoins from many online exchanges. There are a lot more options now than ever before – there are global bitcoin exchanges and also country-specific bitcoin exchanges. You can also buy them from other people via Localbitcoins.

Read : Man buys ₹ 1700 of bitcoin, forgets about them, finds they're now worth ₹ 6 crore

Work for Bitcoins

Some people get paid in bitcoins, instead of cash currencies. Websites such as XBTFreelancer

… and Coinality list jobs with bitcoin payments.

There are other less effective ways to acquire bitcoins. You can get (very) small amounts of bitcoins from bitcoin faucets, which pay you to look at advertisements. You can get them as donations.

There are also bitcoin ‘investments’ but if you wish to not lose money, avoid companies that are listed in Badbitcoin Badlist.

8.How do I send/receive/spend bitcoins?

Bitcoin wallets come with bitcoin addresses, which represent a destination, similar to an email address. Bitcoin addresses are alphanumeric, between 27-34 characters in length. 

Many bitcoin service providers have user-friendly user interface which allows users to generate bitcoin addresses, send and receive bitcoins.

To send bitcoins, users simply have to ensure positive balance in their bitcoin wallets, insert the receiver’s bitcoin address, and hit send. There is a small miner’s fee to process the transaction – miner’s fees are given as a reward and incentive to Bitcoin miners for maintaining equipment.

Bitcoin transactions usually take less than an hour to arrive, but it can take longer or shorter depending on the fee amount and the bitcoin service provider.

You can spend bitcoins anywhere that accept bitcoins as payment. You can also use a Visa/Mastercard-linked bitcoin debit card issued by companies like Wirex or Coinbase.

9.Where can I buy bitcoins in India?

3 most popular BitCoin Trading Platform's In India:

1.) Coinsecure | India's Bitcoin Exchange

2.) Unocoin | India's Bitcoin Wallet

3.) Zebpay Bitcoin India | Buy Bitcoin | Sell Bitcoin | Bitcoin India

10.Are these legal ?

Legal status varies from country to country. In 2013, RBI said it had no plans to regulate Bitcoins, though it had earlier prescribed caution in dealing in them. A formal guideline is yet to come.

11.Can these be used in India?

Only with vendors who can accept them. One can also pay overseas vendors that accept Bitcoins from India. Some Indian startups also offer Bitcoin 'wallet' services.

Read : Man buys ₹ 1700 of bitcoin, forgets about them, finds they're now worth ₹ 6 crore

Man buys ₹ 1700 of bitcoin, forgets about them, finds they're now worth ₹ 6 crore

A Norwegian man  Kristoffer Koch invested 150 kroner ($26.60= ₹ 1700  ) in 5,000 bitcoins in 2009, after discovering them during the course of writing a thesis on encryption. He promptly forgot about them until widespread media coverage of the anonymous, decentralised, peer-to-peer digital currency in April 2013 jogged his memory.

Bitcoins are stored in encrypted wallets secured with a private key, something Koch had forgotten. After eventually working out what the password could be, Koch got a pleasant surprise:

“It said I had 5,000 bitcoins in there. Measuring that in today’s rates it’s about NOK5m ($886,000= ₹ 6 crore),” Koch told NRK.

Income Tax Slab And Rates Applicable from April: FY 2017-18

Proposed income-tax slabs for FY 2017-2018 (assessment year 2018-19) applicable on income earned during 01.04.2016 to 31.03.2017) for various categories of Indian Income Tax payers, announced in Budget 2017 

1.Individual resident aged below 60 years (i.e. born on or after 1st April 1957)

Income Tax :Use Tax Calculator for AY 2017-18

Income Slabs		Tax Rates
i.	Where the taxable income does not exceed Rs. 2,50,000/-.	NIL
ii.	Where the taxable income exceeds Rs. 2,50,000/- but does not exceed Rs. 5,00,000/-.	10% of amount by which the taxable income exceeds Rs. 2,50,000/-. Less : Tax Credit u/s 87A - 10% of taxable income upto a maximum of Rs. 5000/-.
iii.	Where the taxable income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-.	Rs. 25,000/- + 20% of the amount by which the taxable income exceeds Rs. 5,00,000/-.
iv.	Where the taxable income exceeds Rs. 10,00,000/-.	Rs. 125,000/- + 30% of the amount by which the taxable income exceeds Rs. 10,00,000/-.

Surcharge : 15% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)

Education Cess : 3% of the total of Income Tax and Surcharge.

2. Citizen (Individual resident who is of the age of 60 years or more but below the age of 80 years i.e. born on or after 1st April 1937 but before 1st April 1957)

Income Tax :Use Tax Calculator for AY 2017-18

Income Slabs		Tax Rates
i.	Where the taxable income does not exceed Rs. 3,00,000/- Less : Tax Credit u/s 87A - 10% of taxable income upto a maximum of Rs. 5000/-	NIL
ii.	Where the taxable income exceeds Rs. 3,00,000/- but does not exceed Rs. 5,00,000/-	10% of the amount by which the taxable income exceeds Rs. 3,00,000/-. Less : Tax Credit u/s 87A - 10% of taxable income upto a maximum of Rs. 2000/-.
iii.	Where the taxable income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-	Rs. 20,000/- + 20% of the amount by which the taxable income exceeds Rs. 5,00,000/-.
iv.	Where the taxable income exceeds Rs. 10,00,000/-	Rs. 120,000/- + 30% of the amount by which the taxable income exceeds Rs. 10,00,000/-.

Surcharge : 15% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)

Education Cess : 3% of the total of Income Tax and Surcharge.

3. Super Senior Citizen (Individual resident who is of the age of 80 years or more i.e. born before 1st April 1937)

Income Tax :Use Tax Calculator for AY 2017-18

Income Slabs		Tax Rates
i.	Where the taxable income does not exceed Rs. 5,00,000/-.	NIL
ii.	Where the taxable income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-	20% of the amount by which the taxable income exceeds Rs. 5,00,000/-.
iii.	Where the taxable income exceeds Rs. 10,00,000/-	Rs. 100,000/- + 30% of the amount by which the taxable income exceeds Rs. 10,00,000/-.

Surcharge : 15% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)

Education Cess : 3% of the total of Income Tax and Surcharge.

4. Any NRI or HUF or AOP or BOI or AJP

Income Tax :

Income Slabs		Tax Rates
i.	Where the taxable income does not exceed Rs. 2,50,000/-.	NIL
ii.	Where the taxable income exceeds Rs. 2,50,000/- but does not exceed Rs. 5,00,000/-.	10% of amount by which the taxable income exceeds Rs. 2,50,000/-.
iii.	Where the taxable income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-.	Rs. 25,000/- + 20% of the amount by which the taxable income exceeds Rs. 5,00,000/-.
iv.	Where the taxable income exceeds Rs. 10,00,000/-.	Rs. 125,000/- + 30% of the amount by which the taxable income exceeds Rs. 10,00,000/-.

Surcharge : 15% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)

Education Cess : 3% of the total of Income Tax and Surcharge.

* Abbreviations used :
   NRI - Non Resident Individual; HUF - Hindu Undivided Family; AOP - Association of Persons; BOI - Body of Individuals; AJP - Artificial Judicial Person

5. Co-operative Society

Income Tax :

Income Slabs		Tax Rates
i.	Where the taxable income does not exceed Rs. 10,000/-.	10% of the income.
ii.	Where the taxable income exceeds Rs. 10,000/- but does not exceed Rs. 20,000/-.	Rs. 1,000/- + 20% of income in excess of Rs. 10,000/-.
iii.	Where the taxable income exceeds Rs. 20,000/-	Rs. 3.000/- + 30% of the amount by which the taxable income exceeds Rs. 20,000/-.

Surcharge : 12% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)

Education Cess : 3% of the total of Income Tax and Surcharge.

6. Firm

Income Tax : 30% of taxable income.

Surcharge : 12% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)

Education Cess : 3% of the total of Income Tax and Surcharge.

7. Local Authority

Income Tax : 30% of taxable income.

Surcharge : 12% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)

Education Cess : 3% of the total of Income Tax and Surcharge.

8. Domestic Company - Turnover upto Rs. 5 crores

Income Tax : 29% of taxable income.

Surcharge : The amount of income tax as computed in accordance with above rates, and after being reduced by the amount of tax rebate shall be increased by a surcharge

• At the rate of 7% of such income tax, provided that the taxable income exceeds Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)
• At the rate of 12% of such income tax, provided that the taxable income exceeds Rs. 10 crores.

Education Cess : 3% of the total of Income Tax and Surcharge.

9. Domestic Company - Turnover exceeding Rs. 5 crores

Income Tax : 30% of taxable income.

Surcharge : The amount of income tax as computed in accordance with above rates, and after being reduced by the amount of tax rebate shall be increased by a surcharge

• At the rate of 7% of such income tax, provided that the taxable income exceeds Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)
• At the rate of 12% of such income tax, provided that the taxable income exceeds Rs. 10 crores.

Education Cess : 3% of the total of Income Tax and Surcharge.

10. Company other than a Domestic Company

Income Tax :

• @ 50% of on so much of the taxable income as consist of (a) royalties received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 31st day of March, 1961 but before the 1st day of April, 1976; or (b) fees for rendering technical services received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 29th day of February, 1964 but before the 1st day of April, 1976, and where such agreement has, in either case, been approved by the Central Government.
• @ 40% of the balance

Surcharge :

The amount of income tax as computed in accordance with above rates, and after being reduced by the amount of tax rebate shall be increased by a surcharge as under

• At the rate of 2% of such income tax, provided that the taxable income exceeds Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)
• At the rate of 5% of such income tax, provided that the taxable income exceeds Rs. 10 crores.

Education Cess : 3% of the total of Income Tax and Surcharge.

* Marginal Relief :

When an assessee's taxable income exceeds Rs. 1 crore, he is liable to pay Surcharge at prescribed rates mentioned above on Income Tax payable by him. However, the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of Rs. 1 crore by more than the amount of increase in taxable income.

Example

In case of an individual assesseee (< 60 years) having taxable income of Rs. 1,00,01,000/-

1.	Income Tax	Rs. 28,25,300
2.	Surcharge @15% of Income Tax	Rs. 4,23,795
3.	Income Tax on income of Rs. 1 crore	Rs. 28,25,000
4.	Maximum Surcharge payable (Income over Rs. 1 crore less income tax on income over Rs. 1 crore)	Rs. 700/- (1000 - 300)
5.	Income Tax + Surcharge payable	Rs. 28,26,000
6.	Marginal Relief in Surcharge	Rs. 4,23,795/- (423095 - 700)

Free Income Tax Calculator Tool : FY 2017-2018, Moneygaze

How to Write your WILL online (e-Will)

Where there is a will there is a way.  Certainly when there is a WILL there is a less confusion for your legal heirs.

Estate Planning is the process of making a plan in advance and naming whom you want to receive the things you own after you die. Estate Planning is one of the most neglected aspects of personal financial planning.

If the head of the family dies without leaving a Will (Intestate) or without mentioning the nominee names then it is an upheaval task for the legal heirs to access the investments/assets. We have lot of high profile examples for this, like Dhirubhai Ambani, Abraham Lincoln, Picasso, Agatha Christie, who died without writing a Will.

Accumulating assets/wealth may be important, but it is equally important to ensure that your inheritance is passed on smoothly to your heirs.

What is a Will?

The most basic instrument of Estate Planning is a Will. A Will is a legal document that clearly sets out your wishes for the distribution of your assets after your death. It should be done in the presence of two witnesses.

Drafting a Will is a very easy job. Legally speaking, you can just jot down all the properties’ or assets’ details in a piece of paper (Stamp paper is not required). Mention the beneficiaries name(s) and sign on it. Get it attested by two independent witnesses. It is recommended that witnesses should not be the beneficiaries of your will. This is because they should not stand to gain from your Will.

Online e-WILL – Service Providers

As discussed, the process of making a Will is easy. But, you can now get this done online by the experts (mostly lawyers) at a very minimal cost. (Generally lawyers may charge atleast Rs 15000 to Rs 20000 minimum for drafting a Will).

Some of the service providers who are offering this service are:

• HDFC Securities : E-Will
• LegalDesk.com
• Ezeewill.com of NSDL (National Securities Depository Limited)
• Willjini.com

HDFC, NSDL and Willjini are currently offering the online Will drafting service for Rs 4,000. NSDL is charging Rs 250 for any additional reviews. LegalDesk charges Rs 1,999 for creating a Draft Will. Your online Will (draft) will be sent to your e-mail account or to your residence (available at select cities at extra delivery charges.).

Online Will – The Process..

The process of writing an e-will is almost similar with all the service providers.

• Register for e-Will service by providing your personal details. Like – your name, gender, date of birth etc.,
• Get the login credentials (Login Id and password)
• Pay the charges (Rs 4000/-) online using your net-banking account or debit/credit cards.
• Enter your other details like – Residential status (Resident or NRI), Religion, occupation etc.,
• Enter your family member details
• Fill in details of all your assets
• Provide details about who will be the beneficiaries of your assets.
• Generate the E-Will and get the legal Will by email
• Sign the Will and get it attested by two witnesses

All the above service providers claim that this whole process is done in a secured encrypted environment. It is as good as trading financial securities online. They cannot view or access your e-Will details.

Registration of Will

The Registration (or) notarization of the Will is not mandatory. But you may get it registered by visiting the nearest Sub-Registrar office. No stamp duty charges applicable for this. But, you may incur Registration and scanning charges. To register, you have to visit personally along with two witnesses. Carry your original Will, Fitness certificate (given by MBBS Doctor) and KYC documents (address, ID proofs).

Important terminologies used in a Will:

• Testator – The person who makes the Will
• Beneficiary(ies) – The person(s) who inherits property under a Will
• Executor – The testator’s legal representative who will execute the Will. He/she is the person who distributes the assets as per the Will.
• Codicil – This is a legal document used to append, alter or add to an existing Will. Minor changes in the Will can be made using a Codicil

Important points to be noted

Below are few important points to be considered while writing your Will (or) while filling in your details online.

• A Will is considered as a living document. You can make as many changes as you want.
• You should be more than 18 years of age
• Review your Will if you buy new assets (or) sell the existing ones.
• You can change beneficiary(ies) or the Executor names at any point of time. You may make a Codicil.
• It is not mandatory to appoint an Executor however it is preferred
• If possible make sure that the two witnesses and the executor are younger than you. They may be still around when your Will is being executed.
• You may mention minor children as the beneficiaries. But, you have to nominate guardians for them.
• Jointly held properties can be included in your Will. Only to the extent of your share in those kind of assets can be distributed by you in your Will.
• If you have mentioned nominee name while investing in Bonds or Shares then he/she will be the beneficiary. The nomination supersedes the Will. This is applicable for investments which fall under the purview of the Companies Act.
• For all the other investments like Real estate, mutual funds, bank accounts, insurance policies etc., your Will supersedes the nomination.
• A Joint Will can be made. Both spouses can write a joint Will. However, such joint WILL can take effect only after the death of both and not during lifetime of either one.
• You can cancel or revoke the Will at any point of time.
• In case of Christians and Parsis the WILL gets cancelled/revoked on marriage.
• Muslim are mainly governed by their personal laws in respect to WILL and inheritance. As a general rule Muslims can make a WILL of only 1/3 rd of his/her properties and the remaining properties are distributed as per the succession mentioned in Sharia laws.

We are living in a world of uncertainty. Anything can happen at anytime. So, it is advisable to have a written Will irrespective of your age, income or networth. It reduces the chances of legal disputes and lessens the emotional distress of your legal heirs.