Navigating the world of cryptocurrency trading can be both exciting and complex, especially when it comes to understanding platform-specific processes like buying and selling digital assets, fee structures, tax deductions, and portfolio tracking. Whether you're a beginner or an experienced trader, having a clear understanding of how transactions work on crypto exchanges is essential for maximizing returns and ensuring compliance.
This guide breaks down key aspects of crypto trading operations—focusing on practical steps for buying and selling cryptocurrencies, calculating profits and losses, managing orders, and complying with tax regulations such as TDS (Tax Deducted at Source). We’ll also explore common issues users face, including pending orders and locked funds, while providing actionable insights to help you trade more efficiently.
How to Buy and Sell Cryptocurrencies
One of the first steps in crypto trading is learning how to convert fiat currency into digital assets—and vice versa. For Indian users, converting INR (Indian Rupee) balance into stablecoins like USDT (Tether) offers a low-volatility entry point into the market.
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To buy USDT using your INR balance, simply navigate to the trading dashboard, select the USDT/INR pair, enter the amount you wish to purchase, and confirm the transaction. The process is fast, secure, and allows immediate access to a wide range of tradable crypto pairs.
Selling Bitcoin (BTC) or other cryptocurrencies follows a similar flow. Choose the relevant trading pair (e.g., BTC/INR), place a sell order at your desired price—or accept the current market rate—and once matched, the proceeds will reflect in your INR wallet. This seamless conversion enables traders to lock in profits or rebalance their portfolios quickly.
Understanding Trading Fees and Limits
Every transaction on a cryptocurrency exchange incurs fees, which typically fall into three categories: trading fees, deposit fees, and withdrawal fees.
- Trading Fees: These are charged when you buy or sell cryptocurrencies. Most platforms use a maker-taker model, where “makers” (those who add liquidity by placing limit orders) pay lower fees than “takers” (those who remove liquidity with market orders).
- Deposit Fees: Generally, depositing INR or crypto assets is free on most Indian exchanges.
- Withdrawal Fees: A small network fee applies when withdrawing crypto to external wallets. This varies depending on blockchain congestion and the specific asset.
It’s important to note that each cryptocurrency has a minimum trading limit. For example, you may need to trade at least 0.001 BTC per order. Always check these thresholds before placing trades to avoid failed transactions.
Managing Orders: Pending, Open, and Cancellation
A common challenge for new traders is dealing with pending or open orders that don’t execute immediately. This usually happens when your order price doesn’t match the current market price. If you've placed a limit order above the market rate when selling (or below when buying), it will remain open until the market reaches your specified price.
If you no longer wish to proceed, you can cancel your buy or sell order manually through the "Open Orders" section of your trading interface. Once canceled, the locked funds are released back into your available balance.
Understanding how stop-limit orders work can also enhance your trading strategy. A stop-limit order allows you to set two price points: a stop price that triggers the order and a limit price that defines the execution price. This tool helps manage risk by automatically entering or exiting trades under predefined conditions.
Tracking Profit and Loss Accurately
Knowing how your portfolio performs over time is crucial for making informed decisions. Most platforms calculate Profit & Loss (P&L) based on:
- Entry and exit prices of trades
- Transaction fees
- Current market value of held assets
The system compares your average buy price against the current market price or actual sell price to determine gains or losses. Keep in mind that unrealized P&L (on holdings) fluctuates with market movements, while realized P&L (from completed sales) is fixed.
You can view detailed order history and transaction records in your account dashboard. This includes timestamps, prices, quantities, fees, and order status—giving you full transparency into every trade.
Dealing with Locked Funds and Negative Balances
Sometimes users notice that part of their balance appears as “locked” or “in orders.” This indicates funds currently allocated to active limit orders. Until those orders are filled or canceled, the amount remains reserved.
In rare cases, users may see a negative funds balance. This often results from placing multiple overlapping orders across different devices or apps without sufficient available balance. It can also occur due to temporary system discrepancies during high-volatility periods. In such cases, contacting customer support promptly helps resolve the issue.
Tax Compliance: TDS on Crypto Transactions
Since 2022, India has implemented a 30% tax on cryptocurrency gains, along with a 1% TDS (Tax Deducted at Source) on all crypto trade transactions. This means that for every sale of digital assets, 1% of the transaction value is automatically deducted and remitted to the government.
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TDS applies regardless of profit or loss and is deducted at the time of trade execution. While this may seem burdensome, it simplifies tax reporting—since TDS records are reported directly to tax authorities by exchanges.
Users can track TDS deductions through their transaction history or tax statements provided by the exchange. These records are vital during income tax filing and help ensure compliance with Indian tax laws.
Frequently Asked Questions
Q: Is TDS applicable on both buying and selling of crypto?
A: Yes, 1% TDS is deducted on both buy and sell transactions involving cryptocurrencies in India.
Q: Why is my order not executing even though I placed it hours ago?
A: Your order might be a limit order waiting for the market price to reach your set price. Check if your price aligns with current market rates.
Q: Can I get a refund if too much TDS was deducted?
A: Excess TDS paid can be claimed back during annual income tax return filing, subject to overall tax liability assessment.
Q: How do I check my complete trading history?
A: Go to your account’s order history or transaction log section—most platforms provide filters by date, asset type, and transaction kind.
Q: Are there ways to reduce trading fees?
A: Yes—using limit orders instead of market orders often results in lower fees. Some platforms also offer fee discounts based on trading volume or token holdings.
Q: What happens to my funds if I close my account?
A: You must withdraw all funds before closing your account. Any remaining balance could be subject to dormancy fees or recovery procedures.
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Final Thoughts
Mastering the mechanics of crypto trading goes beyond just buying low and selling high. It involves understanding platform rules, managing orders effectively, monitoring fees, and staying compliant with tax regulations like TDS. By familiarizing yourself with these core elements—from portfolio tracking to resolving common issues like locked balances—you position yourself for long-term success in the digital asset space.
With proper knowledge and strategic planning, cryptocurrency trading can become a powerful tool for wealth creation—offering speed, transparency, and global access unlike traditional financial markets.
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