Cryptocurrency trading in India is taking another pattern and shape due to the enforcement of taxation laws. As a result, traders are facing a different turn in their transactions in the country recently. The new rule for 1% taxation on every transaction in India has been implemented from 1st July. Also, the government has a taxation rule of 30% on crypto income for traders, investors and other participants in the sector.
Thereafter, trading volumes have registered a steep decline on the applicable law. On an average, the three major crypto exchanges in India have recorded losses of up to 72.5% since the tax was implemented.
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From July 1, India implemented Tax Deducted at Source (TDS), creating a negative outlook for traders. This has resulted in a drop in the overall crypto trading volume in the country, as observed by most of the exchanges. Reportedly, the record on July 3 shows that CoinDCX has lost 90.0% in trading volume. On the BitBNS side, the decline was around 37.4%.
Data from CoinGecko revealed slight stability in volume after the crash of lower values. However, the average record shows a drop of 56.8% in volumes.
Most of the notable crypto traders are currently on edge with an outline of the recent events in the Indian crypto market. One of the businessmen, Shaunak Shetty from Mumbai revealed his opinion about the new taxation of 30% on income and TDS.
On July 4, Shetty said such rules would harm the visionary talent in the country. Shetty said he is now seriously looking at the benefits of staying with the Indian exchange. To them, other places like Dubai seem more attractive and conducive to higher profits.
Crypto Exchanges Report Huge Revenue Drops
Lower trading volumes significantly reduced the revenue generated for the Indian exchanges as a whole. On July 4, Crypto India, a YouTube channel in the country, tweeted that with trading fees of 0.1%, most exchanges could only see small revenues. The combined daily funds for Zebpay, WazirX, and CoinDCX are $21,649 amount The level has reached a low level.
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Some of the major exchanges such as WarizX, CoinDCX, BitBNS and Zebpay have seen a drop in average daily trading volume. As of July 4, the value was $5.6 million, while the June value was $9.6 million.
Anuj Choudhary, Policy Analyst, WazirX, said in a clarification that the TDS of 1% covers all virtual assets. Chowdhary gave his clarification on YouTube during The WazirX Show for the June 30 episode. Listed assets include cryptocurrencies, NFTs, Metaverse or other transactions executed on public blockchains.
However, some tax exemptions exist. These include gift cards, reward points and mileage points for discounts or accessories. There are cards for membership on other websites, applications, platforms, and incentives devoid of monetary considerations.
Featured image from Pexels, chart from TradingView.com