Cryptocurrency trading is taking on a different pattern and shape in India due to the implementation of tax laws. As a result, traders are recently experiencing another change in their trading in the country. The new regulation in India of taxing 1% on all transactions has been in effect since July 1. In addition, the government has a regulation to levy a 30% tax on crypto income for traders. traders, investors and other participants in the field.
After that, the trading volume fell sharply compared to the applicable law. On average, three popular Indian crypto exchanges have recorded a drop of up to 72.5% since the implementation of the Tax.
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From July 1st, India implemented Withholding Tax at Source (TDS), creating a negative stance for traders. This has caused the overall crypto trading volume in the country to drop, as has been witnessed by most exchanges. Follow report, records on July 3 show that CoinDCX has experienced a 90% drop in trading volume. On the BitBNS side, the drop is around 37.4%.
Data from CoinGecko shows a slight stabilization in volume after falling to low values. However, the average record shows a 56.8% drop in volume.
Most notable crypto traders are currently competing with the emergence of recent events in the Indian crypto market. One of the traders, Shounak Shetty from Mumbai, revealed his opinion on the new 30% tax on income and TDS.
On July 4, Shetty announced that such regulations would hurt visionary talent in the country. Shetty mentioned that he is currently seriously considering the profitability of sticking with the Indian exchange. To him, other places like Dubai seem more attractive and profitable.
Cryptocurrency exchanges record severe revenue decline
Low trading volume significantly reduces the overall revenue generated for Indian exchanges. On July 4, Crypto India, a YouTube channel in the country tweeted that with a 0.1% transaction fee, most exchanges can only see small revenue. The daily combined amount for Zebpay, WazirX and CoinDCX is $21,649 which is volume lowest level.
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Some of the top exchanges such as WarizX, CoinDCX, BitBNS, and Zebpay have decreased average daily trading volumes. As of July 4, the value is $5.6 million compared to a June value of $9.6 million.
In an explanation, Anuj Chaudhary, Policy Analyst at WazirX, stated that the 1% TDS covers all virtual assets. Chaudhary gave his explanation on YouTube during The WazirX Show for the June 30 episode. The listed assets include cryptocurrencies, NFTs, metaverse, or other transactions conducted on public blockchains. .
However, there are very few cases that are exempt from tax. These include gift cards for discounts or merchandise, reward points, and accruals. Other cards are subscription cards on websites, apps, platforms, and offers that don’t count for money.
Featured image from Pexels, chart from TradingView.com