The volume of cryptocurrency trading in India has taken a hit after tax laws for digital assets went into effect on April 1. CoinDCX and WazirX among other Indian crypto exchanges have witnessed a significant drop 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 is being deducted from all profits generated via crypto trading in the nation. The tax laws also instruct Indian crypto users to pay one percent TDS on each crypto transaction.
“April 1, 2, and 3 were holidays. Since then volumes are continuing to fall. It can go further down or sideways but it is unlikely to go back up. It is clear that the new tax has impacted the market negatively. The government must look into this and because there is no way to stop this (crypto), the government should embrace the technology,” Coindesk quoted Sidharth Sogani, the founder and CEO of Crebaco as saying.
The trading volumes on WazirX, ZebPay, CoinDCX, and BitBns have dropped down by 72 percent, 59 percent, 52 percent, and 41 percent respectively, the report says.
Sogani has reportedly claimed the information surfacing in this report was compiled by analysing various crypto exchanges operating in the nation.
Since its announcement earlier in February, India's crypto tax has been a reason of conflict among members of the Indian crypto community.
While several industry experts and crypto enthusiasts have lauded the government for taking a ‘regulate-over-restrict' approach towards the high-risk asset class, others have asked for a lower tax on crypto incomes.
On April 10, Sathvik Vishwanath, the CEO of Indian exchange UnoCoin had tweeted that investors from the middle-income category in India are suffering due to India's tax laws on virtual assets.
On Twitter, #ReduceCryptoTax has been making it to the India trends list for some time now.
Crypto industry insiders had earlier expressed fears of an investor exodus post the enforcement of tax laws on virtual assets in India.
The government of India, has however, maintained its stance that the laws have been brought in to curb the potential exploitation of virtual assets.
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