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WazirX Releases Crypto Glossary Ahead of Indian Budget

By January 26, 2024February 15th, 202411 minute read

India, 25 January 2024 – WazirX is excited to share a #Cryptobudgetology, a user-friendly glossary for crypto enthusiasts in anticipation of the Indian budget on February 1, 2024. Released on January 25, 2024, this glossary simplifies fiscal terms, empowering users with valuable insights.

“As we approach the budget, we want to equip our users with knowledge. This glossary is a step towards demystifying complexities and fostering a more informed crypto community.” – Mr. Rajagopal Menon, VP Marketing, WazirX.

View the glossary here:

India“India” refers to the territory of India as defined in Article 1 of the Constitution, including its territorial waters, seabed, subsoil underlying such waters, continental shelf, exclusive economic zone, or any other maritime zone according to the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976 (80 of 1976), along with the airspace above its territory and territorial waters.
Finance MinisterThe Finance Minister (FM) holds the position of the head of the Ministry of Finance in the Government of India, also known as FinMin or FM. On February 1, 2024, Nirmala Sitharaman, the current Finance Minister, is scheduled to present the annual Budget in Parliament.
Interim BudgetThe “Interim Budget” is a financial statement presented by the government in an election year or transitional period when a full annual budget is impractical. It addresses immediate financial needs until a new government takes over, outlining essential expenditures and revenue sources. On February 1, 2024, an interim budget is scheduled to be presented.
Union BudgetThe “Union Budget” is the annual financial statement of the Government of India. It outlines the country’s revenue and expenditure, presenting a comprehensive plan for economic policies, fiscal priorities, and financial allocations across various sectors for the upcoming fiscal year. The Union Budget is presented in the Parliament by the Finance Minister and plays a crucial role in shaping the economic direction of the nation.
Previous Year“Previous Year” refers to the financial year preceding the assessment year. For example, if the assessment year is 2024-2025, the previous year would be 2023-2024, during which the taxpayer’s income is earned and financial transactions occur, forming the basis for taxation in the subsequent assessment year.
Assessment Year“Assessment Year” refers to the year in which the income earned during the previous year is evaluated and taxed. It means the period of twelve months commencing on the 1st day of April every year. For instance, if the previous year is 2023-2024, the assessment year would be 2024-2025. During the assessment year, individuals or entities file their income tax returns, and the relevant authorities assess and determine the applicable taxes based on the income earned in the previous year.
Direct Taxes“Direct Taxes” are taxes imposed directly on individuals or entities by the government. These taxes, such as income tax, are paid directly by the taxpayer and are not transferred or shifted to others.
Indirect Taxes“Indirect Taxes” are levies imposed on goods and services by the government, with the flexibility to shift the tax burden. In contrast to direct taxes paid directly to the government, indirect taxes are collected by intermediaries like sellers and transferred to the end consumer. Examples of indirect taxes include the Goods and Services Tax (GST).
Halwa Ceremony“Halwa Ceremony” is a pre-budget tradition in India where officials share a sweet dish, halwa, to kick off the printing of budget documents, symbolizing the beginning of the final stages before the annual budget presentation.
Finance BillThe “Finance Bill” is a yearly legislative proposal in Parliament that enacts the government’s financial plans from the Union Budget, covering taxation and expenditure. Once approved, it becomes the Finance Act, legally implementing budgetary measures.
Fiscal Deficit“Fiscal Deficit” occurs when a government’s total expenditures exceed the revenue that it generates, excluding money from borrowings.
Income Tax“Income Tax” is a direct tax imposed by the government on an individual’s or entity’s earnings. It is levied on income earned from various sources, such as salaries, business profits, and investments.
TDS“TDS”, or “Tax Deducted at Source”, is a mechanism where a payer deducts tax from certain payments at prescribed rates and remits it to the Central Government within a specified time frame. Currently, a 1% TDS is applied on the transfer of Virtual Digital Assets.
Rate of TDSThe rate of Tax Deducted at Source (TDS) is the percentage at which tax is deducted from payments. Specific rates are defined for various types of income in the Income Tax Act. For Virtual Digital Asset (VDA) transactions, the specified rate is 1%.
DeductorA “deductor” is an individual or entity mandated by the provisions of the Income-tax Act to deduct tax at source.
DeducteeA “deductee” is an individual or entity from whom tax is being deducted in accordance with the provisions of the Income-tax Act.
GST“GST”, or “Goods and Services Tax”, is a comprehensive indirect tax levied on the supply of goods and services in India. It replaced multiple indirect taxes to create a unified tax system. GST is applied at each stage of the production and distribution chain, and it aims to streamline the taxation process, reduce complexities, and foster a more transparent and efficient tax structure.
VDA“VDA” stands for “Virtual Digital Assets”, covering digital assets like information, code, numbers, or tokens generated through cryptographic means. These assets represent value and can be exchanged with or without consideration. Examples include NFTs or similar tokens. The definition allows for the inclusion of other digital assets as specified by the Central Government. VDAs can be electronically transferred, stored, or traded, serving functions like a store of value or a unit of account in financial transactions or investments.
TransferIn the context of Virtual Digital Assets (VDA), “Transfer” includes actions like sale, exchange, relinquishment, extinguishment of rights, compulsory acquisition, conversion into stock-in-trade, and possession transactions (like those related to immovable property), as well as various transactions enabling transfer or enjoyment.
Set-Off of Loss“Set-Off of Loss” refers to the practice of adjusting losses incurred from one source of income against profits earned in another source of income. However, there is no provision for the set-off of losses from the transfer of virtual digital assets, indicating that losses in this category cannot be offset against profits from other income sources.
Carry Forward of Loss“Carry Forward of Loss” refers to the practice of carrying forward losses from the current financial year to the next financial year to adjust them against future profits. However, there is no provision for the carry forward of losses specifically related to Virtual Digital Assets (VDA). This indicates that losses from VDA cannot be carried forward to offset against future profits.
Capital Gains“Capital gains” are profits or gains resulting from the transfer of a capital asset and are subject to taxation under the “Capital Gains” head.
Cost of Acquisition“Cost of Acquisition” for Virtual Digital Assets (VDA) refers to the expenses incurred in acquiring the asset. The computation of the cost of acquisition is in accordance with the provisions of the Income-tax Act.
Fair Market Value“Fair market value” for a capital asset is the price it would fetch in the open market on the relevant date. If this price is not ascertainable, it is determined according to the rules under the Income-tax Act.
NFTA “Non-Fungible Token (NFT)” is defined as a digital asset as specified by the Central Government through an official notification in the Official Gazette.
Web3“Web3” refers to the third era of the internet, emphasizing decentralized and blockchain-based technologies. It envisions a more open, transparent, and user-centric web, with increased security and privacy through the use of decentralized protocols and cryptos.
Blockchain“Blockchain” is a decentralized digital ledger that records transactions across a network of computers. It ensures transparency, security, and immutability of data by using cryptographic techniques.
AssesseeAn “assessee” refers to a person liable for the payment of taxes or any other sum of money under the Income-tax Act. This term encompasses individuals for whom proceedings have been initiated under the Income-tax Act. Additionally, it includes entities categorized as ‘deemed assessee’ and ‘assessee-in-default.’
RelativeIn the context of an individual, the term “relative” refers to the husband, wife, brother, sister, or any lineal ascendant or descendant of that individual.
Digital RupeeThe “Digital Rupee (e₹)”, also known as eINR or E-Rupee, is a tokenized digital form of the Indian Rupee. It is issued by the Reserve Bank of India (RBI) as a central bank digital currency (CBDC), leveraging blockchain distributed-ledger technology.
Fintech“Fintech” is a term combining “financial” and “technology,” referring to innovative technologies and solutions that enhance and automate financial services. Fintech companies leverage digital platforms, data analytics, and other technologies to provide services such as online banking, digital payments, and investment management.
FIU“Financial Intelligence Unit of India (FIU-IND)” is the central national agency responsible for receiving, processing, analyzing, and disseminating information related to suspected financial transactions. FIU-IND plays a crucial role in coordinating and enhancing the efforts of national and international intelligence, investigation, and enforcement agencies in the global fight against money laundering and terrorism financing. It operates as an independent body reporting directly to the Economic Intelligence Council (EIC), which is headed by the Finance Minister.
Cryptocurrency ExchangeA “cryptocurrency exchange” is an online platform that facilitates the buying, selling, and trading of various cryptocurrencies. It acts as an intermediary, connecting buyers and sellers, and provides a marketplace for the exchange of digital currencies such as Bitcoin, Ethereum, and others. Users can create accounts on these platforms to trade cryptocurrencies based on current market prices.
Altcoin“Altcoin” is a term used to describe any crypto other than Bitcoin. It encompasses a wide range of digital currencies, such as Ethereum, Ripple, Litecoin, and others, each with its own unique features and purposes.
Blockchain Explorer“Blockchain Explorer” is a web-based tool or application that allows users to view and track information on a blockchain. It provides real-time details about transactions, addresses, and blocks on the blockchain network. Users can use a blockchain explorer to verify and explore the history of transactions and monitor the overall health and activity of the blockchain.
DeFi“DeFi” or “Decentralized Finance” represents a burgeoning ecosystem leveraging blockchain to recreate traditional financial services without centralized intermediaries. DeFi applications include lending, borrowing, and decentralized exchanges.
ICOA crypto wallet is a software or hardware-based account that enables users to own storage for their crypto assets. It also works as a proof of how much crypto a certain user own, very similar to a bank account. The wallet is used for sending or receiving crypto assets and acts as a database to determine what crypto you own based on its connectivity to the blockchain network of the said crypto.
Mining“Mining” in cryptocurrency involves validating transactions and adding them to the blockchain. Miners use computational power to solve complex problems, earning rewards in newly created coins for securing the network.
FOMO“FOMO” stands for “Fear of Missing Out.” In the context of cryptocurrency, it represents the anxiety or apprehension that investors may feel about potentially missing profitable opportunities in the rapidly evolving market. FOMO often influences investment decisions as individuals fear they might miss out on significant gains.
WalletA “crypto wallet” is a software or hardware-based account that enables users to own storage for their crypto assets. It also works as proof of how much crypto a certain user owns, very similar to a bank account. The wallet is used for sending or receiving crypto assets and acts as a database to determine what crypto you own based on its connectivity to the blockchain network of the said crypto.
Smart Contract“Smart contracts” are immutable codes stored on blockchain, which intrinsically have a set of protocols/requirements added to them so that all actions on the blockchain are executed if a prompt checks all the boxes. These are usually used for confirming all terms of an agreement that has been mutually created by all stakeholders for a specific function. Once all requirements are met for this function by the parties involved, the action takes place on the blockchain. Since the agreement is immutable, it cannot be tampered with to benefit anyone specifically.
Hash Rate“Hash rate” is the computational power of a blockchain which denotes how many actions can be performed per second. In consensus mechanisms such as proof of work, the hash rate can determine network difficulty, which means a higher hash rate could create a more secure network by making it difficult for validators to solve puzzles in order to run nodes.
TokenA “crypto token” is a virtual asset built on a blockchain that represents the value of a particular token. These tokens are used for trading, proving ownership, and getting access to different features within an ecosystem.
Gas Fee“Gas fee” is the cost of processing a transaction. On Ethereum, It is represented by how many crypto tokens are used to execute a transaction on the Ethereum blockchain. The gas fee is a reward mechanism for validators who stake their tokens on the network
Whale“Crypto whales” are investors who have substantial wealth invested in crypto assets. Their transactions have the power to influence market prices and also change market sentiment. Since they have a lot of power in crypto markets, they are referred to as whales.
Hard ForkA “hard fork” is a permanent change to a blockchain network that is introduced when the community agrees to add new features to keep up with the changing ecosystem. This also results in two versions of the same blockchain where the previous version runs with all the databases intact on the blockchain, and the new version has added features integrated.
Soft ForkA “soft fork” on a blockchain is a change on the network that doesn’t affect previously validated blocks and integrates new upgrades seamlessly while ensuring all previous transactions are accepted. These are usually simple changes, and no new tokens are created for the new version of the blockchain upon implementation of a soft fork.
Staking“Crypto Staking” is referred to as locking in tokens on a blockchain to participate in activities on that network, such as validating transactions. Stakers are usually called validators and are chosen to create new blocks on Proof of Stake mechanisms. As a reward, they receive additional tokens from the network.
Dapp“dApps” are decentralized applications on blockchain networks that are not controlled by any single authority. They operate based on smart contracts, which means the terms of their functions are transparent and irreversible. They are usually run by several networks and are used for DeFi apps predominantly.
Private KeyA “private key” is simply like a password.
Public KeyA “public key” is a cryptographic code that is used to send messages or carry out transactions to a particular wallet address. This can be shared by a user with anyone who wants to interact with them on the blockchain network.
Oracles“Blockchain oracles” are services that connect a blockchain to other blockchains or non-blockchain-based networks such as extensive databases. They utilize real-world information, including data from off-chain networks, to build commands for smart contracts.
WhitepaperA “cryptocurrency whitepaper” is a detailed document covering extensive information about a blockchain network, its underlying infrastructure, utility, features, and token mechanisms. It offers an insight into the project, its builders and their vision, the community, and its future plans. It’s usually used by investors to research about particular tokens before investing in them.

About WazirX

WazirX, a proud made-in-India crypto exchange, allows users to buy, sell, and trade various crypto assets like Bitcoin, Ether, Litecoin, and more. Today, it is one of India’s largest crypto exchanges and has over 15 million users. Founded by Nischal Shetty, Siddharth Menon, and Sameer Mhatre, WazirX aims to make crypto accessible to every Indian.

Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.
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