India has tightened the bolt on trading in cryptocurrency assets, with the latest tax deduction at source (TDS) of 1% being the latest addition to the tax rules for the platform. Following this, the country’s crypto exchanges have been hit hard as the new tax rates have reduced trading volumes.
1% according to Reuters TDS Traders and industry executives said this month has been yet another discouragement for investors on cryptocurrency trades in India, in a market where a cumbersome regulatory regime and 30% digital income tax have already reached 60-70% .
coinswitch“A mix of macro factors and regulatory developments in India have resulted in significant volume declines across exchanges,” said CEO Ashish Singhal in an interview with Reuters.
Meanwhile, Rajagopal Menon, vice president of WazirX crypto exchange, told the news agency that “as far as volumes are concerned, we are scrapping the bottom of the barrel,” adding, “the volume of regulatory entanglements, trading The lack of ease of doing and the paperwork created on every single trade has made investors and traders wary and we are seeing people moving to international exchanges or gray markets.”
On Tuesday, WazirX and Zebpay launched a survey on trader sentiment that revealed that 83 percent of traders believe that the recent tax implementation has disrupted their trading frequency. In addition, around 24% of the respondents are considering shifting their trading activities to international exchanges due to higher taxation. In addition, 29% of respondents traded less than in the pre-tax period.
Also, the survey reported that 27% of respondents sold more than 50% of their portfolio before April 1, while 57% sold under 10%. In the current scenario, revenue from tax collection for the government will decline as 27% of customers (34% of traders and 23% of holders) said they would do less business than before due to the current taxation policy.
Talking about the bear market, Singhal explained that the current bear market has affected equities, bonds and other investment segments. Crypto is no different. Volume in the Indian crypto market is following the global trends. He said, “We believe that the bear market is temporary, and crypto is here to stay. It is an emerging attractive asset class, and we continue to strive to increase user awareness to help inform clients/users.” Will make decisions through a mix of owned, earned and paid communication platforms.”
“The bear market is a clean-up process. Weak businesses will perish, while companies with strong product-market fit and the right business model will emerge stronger,” Singhal said.
After the 30% tax rate, cryptocurrencies also face 1% TDS from July 1. This means that an Indian citizen selling his assets either Bitcoin, Ethereum, Tether, BNB, Shibu Inu, Solana and Dogecoin, and others will get 1% less. Value of your property at the sale price. Experts have mixed opinion about the new TDS. Some believe that this would discourage cryptocurrency investment, or that it would be detrimental to the industry.