Crypto Trading Volume in India Nosedives in Days After Tax Rule

Cryptocurrency trading volume in India has been affected after the tax law for digital assets came into force on April 1. CoinDCX and WazirX among other Indian crypto exchanges have seen a significant drop in crypto trading volumes, according to a report released by Mumbai-based research. Firm Krebaco has claimed. As announced by Finance Minister Nirmala Sitharaman, 30 percent tax is being deducted from all profits generated through crypto trading in the country. Tax laws also instruct Indian crypto users to pay one percent TDS on every crypto transaction.

“April 1, 2 and 3 were holidays. Volumes have continued to decline since then. It may go further down or sideways but it is unlikely to go back up. Clearly, the new tax has had a negative impact on the market. The government should look into this and because there is no way to stop it (crypto), the government should embrace the technology,” Coindesk quoted Crabco founder and CEO Siddharth Sogni as saying.

The report noted that trading volumes on WazirX, ZebPay, CoinDCX and BitBns declined by 72 percent, 59 percent, 52 percent and 41 percent, respectively.

Sogni has reportedly claimed that the information revealed in this report was compiled by analyzing various crypto exchanges operating in the country.

Since its announcement in February, India’s crypto tax has been a cause of conflict among members of the Indian crypto community.

While many industry experts and crypto enthusiasts have commended the government for taking a ‘regulation-more-restrictions’ approach to the high-risk asset class, others have called for a lower tax on crypto earnings.

On 10 April, Satwik Viswanath, CEO of Indian exchange UnoCoin, tweeted that middle-income investors in India are suffering due to India’s tax laws on virtual assets.

On Twitter, #ReduceCryptoTax has been trending in India for quite some time now.

Crypto industry insiders had earlier expressed fears of an exodus of investors after the imposition of tax laws on virtual assets in India.

However, the Indian government has maintained its stand that laws have been brought in to prevent potential exploitation of virtual assets.

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