Indian crypto trading volumes slump following hefty taxes

Indian crypto trading volumes slump following hefty taxes

The trading volume of three major Indian crypto-exchanges has dropped 72.5% since July 1, when India imposed a 1% transaction tax.

TDS (tax deducted at source) was implemented on July 1. It appears that it has negatively affected traders. Exchange volumes fell from 37.4% on BitBNS to 90.9% on CoinDCX between July 3 and July 3. According to CoinGecko, volumes have slightly stabilized since the lows, but they are still down 56.8% per annum.

Indian YouTube channel Crypto India tweeted July 4 that exchange revenue, which is based on a 0.1% fee for trading, was low due to low volume levels. WazirX and CoinDCX took in $21,649 each day at the lowest volume levels.

Three months after the new crypto laws were implemented, Indian Crypto Exchange’s trading volume plunged by 90-95%. Current volumes show that exchanges can only generate trading fee revenue between $1000 and $3000 Max. Bitbns appears to be doing well. It’s going to be tough times. pic.twitter.com/KNDbea9BCn
— July 4, 2022, Crypto India (@CryptooIndia).

Crypto traders such as Shounak Shetty from Mumbai are also suffering. Shetty stated to Economic Times that he believes that the TDS and 30% income tax in India on cryptocurrency trades will hurt the talent pool in South Asia. He stated that

“Like other traders I’m trying to figure out how to make it profitable to trade on Indian exchanges. This will result in a brain drain of professional traders who are looking for countries that are more welcoming, such as Dubai.

Anuj Chaudhary, WazirX’s Policy analyst, explained that the 1% TDS applies to “digital assets” (either NFT, metaverse or any type of transaction occurring on top of public Blockchains.

As a test, the tax will be in place for three months. Although trading volumes are still low, policymakers would like to see the results over a longer period of time.

Gift cards that are used to purchase goods, get a discount, miles points, reward points or loyalty incentives, without any monetary considerations, are exempted from tax. Subscriptions to websites, platforms or applications, however, are also exempted.

Related: The Reserve Bank of India places crypto at the bottom of systemic risk despite severe criticism

Chaudhary’s show counterpart, Muthuswamy, Head of Legal at WazirX accurately predicted that TDS would have a negative impact on high volume, high-value traders using Indian platforms. He stated that he believed the TDS would discourage newcomers and low frequency traders from getting crypto exposure.

In June, the average daily transaction volume between WazirX and Zebpay, BitBNS and CoinDCX was $9.6million per day. However, that number has dropped to $5.6 million by July 4.

2021's Most Anticipated Growth & Wealth-Building Opportunity

Join Thousands of Early Adopters Just Like You Who Want to Grow Capital and Truly Understand Cryptocurrency Together

Amy Jimenez

Amy Jimenez– Services My name is Amy Jimenez, and I am the main writer behind the" allthetopnews.com" for the ground-breaking and most fragile bits of knowledge into the most recent news in the services sector. I began my voyage of work as an autonomous investment advisor. I had around 4 years of involvement in this field. I am a free soul so; my energy for investigating the world has taken me to the countries over the globe and allowed me to report for a part of the best news affiliations. At present, I am a full-time manager as experienced in the account and began to utilize my capacities.

2021's Most Anticipated Growth & Wealth-Building Opportunity

Join Thousands of Early Adopters Just Like You Who Want to Grow Capital and Truly Understand Cryptocurrency Together

Close Bitnami banner
Bitnami