The volume of cryptocurrency trading in India has taken a hit after digital asset tax laws came into effect on April 1. CoinDCX and WazirX, among other Indian crypto exchanges, have witnessed significant declines in crypto trading volumes, a report released by Mumbai-based research firm Crebaco has claimed. As announced by Finance Minister Nirmala Sitharaman, a 30 percent tax will be withheld from all profits generated through crypto trading in the nation. The tax laws also instruct Indian crypto users to pay one percent TDS for every crypto transaction.
“April 1, 2 and 3 were public holidays. Since then, volumes have continued to fall. It may go further down or sideways, but it’s unlikely to go back up. It is clear that the new tax has negatively impacted the market. The government needs to look into this and because there is no way to stop this (crypto), the government needs to embrace the technology,” Coindesk quoted Sidharth Sogani, the founder and CEO of Crebaco.
Trading volumes on WazirX, ZebPay, CoinDCX and BitBns are down 72 percent, 59 percent, 52 percent and 41 percent, respectively, the report said.
Sogani has reportedly claimed that the information revealed in this report was compiled by analyzing several crypto exchanges operating in the country.
Since its announcement earlier in February, the Indian crypto tax has been a source of conflict among members of the Indian crypto community.
While several industry experts and crypto enthusiasts have praised the government for adopting a regulate-over-restrict approach to the high-risk asset class, others have called for a lower tax on crypto income.
On April 10, Sathvik Vishwanath, the CEO of the Indian exchange UnoCoin, tweeted that middle-income investors in India are suffering from India’s tax laws on virtual assets.
On Twitter, #ReduceCryptoTax has been on the Indian trends list for a while now.
In 10 years, USA, Dubai, Singapore will be the hub of Blockchain development and India will be the hub of talented blockchain developers working for Rs.25000/month in TCS, Wipro, Infy :innocent:#reducecryptoax
— Neel (Crypto Jargon) (@Crypto_Jargon) Apr 6, 2022
Taxation can be a way to promote innovation in new areas or it can be the sword that kills innovation completely. We have to think about what we want.#reducecryptoax
— Shivam Chhuneja (@shivamchhuneja) Apr 9, 2022
Crypto industry insiders had previously expressed fears of an investor exodus following the enforcement of tax laws on virtual assets in India.
However, the government of India has maintained its position that the laws have been put in place to curb the potential exploitation of virtual assets.
Cryptocurrency is an unregulated digital currency, not legal tender and subject to market risks. The information contained in the article is not intended as financial advice, trading advice or any other advice or recommendation of any kind offered or endorsed by DailyExpertNews. DailyExpertNews is not responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article.
