Cryptocurrency trading is taking another pattern and shape in India due to the implementation of taxation laws. As a result, the traders are experiencing a different turn in their transactions lately in the country. The new rule in India for 1% taxation on every transaction has been enforced from July 1. Also, the government has a taxation rule of 30% on crypto income for traders, investors, and other participants in the field.
Subsequently, trading volumes have made a drastic drop over the applied law. On average, India’s three prominent crypto exchanges recorded up to 72.5% dip since the enforcement of the Tax.
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From July 1, India enforced the Tax Deducted at Source (TDS), creating a negative stance for traders. This has brought a plunge in the overall crypto trading volumes in the country, as witnessed by most exchanges. According to the reports, the record on July 3 shows that CoinDCX had a 90.0% drop in trading volumes. On the part of BitBNS, the decline was about 37.4%.
Data from CoinGecko revealed slight stability in volumes after crashing to the low values. However, the average record shows a downward move of 56.8% in the volumes.
Most notable crypto traders are currently on edge with the outplaying of recent events in the Indian crypto market. One of the traders, Shounak Shetty from Mumbai, disclosed his opinions concerning the new taxation of 30% on income and TDS.
On July 4, Shetty stated that such rules would damage visionary talents in the country. Shetty mentioned that he is now seriously contemplating the profitability of sticking with the Indian exchange. To him, other places like Dubai seem more inviting and conducive to higher gains.
Crypto Exchanges Record Drastic Revenue Drop
The low trading volumes drastically reduced the overall generated revenues for Indian exchanges. On July 4, Crypto India, a YouTube channel in the country tweeted that with a trading fee of 0.1%, most exchanges could only see small revenues. The combined daily funds for Zebpay, WazirX, and CoinDCX are $21,649 as volume levels hit the lows.
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Some leading exchanges like WarizX, CoinDCX, BitBNS, and Zebpay have a drop in the average daily transaction volume. As of July 4, the value is $5.6 million as against the June value of $9.6 million.
In an explanation, Anuj Chaudhary, Policy Analyst in WazirX, stated that the TDS of 1% 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 executed on public blockchains.
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However, few exemptions to the tax exist. These include gift cards for discounts or goods, rewards points, and mileage points. Others are cards for subscriptions on websites, applications, platforms, and incentives void of monetary considerations.
Featured image from Pexels, chart from TradingView.com