Cryptocurrency trading is taking another model and form in India due to the implementation of tax laws. As a result, traders have experienced a different turnaround in their trading in the country recently. India implemented a new 1% tax on every transaction from July 1. In addition, the government imposes a 30% tax on the crypto income of traders, investors and other players in the space.
Subsequently, transaction volumes fell sharply from the applicable law. On average, three prominent Indian cryptocurrency exchanges have fallen by as much as 72.5% since the tax was implemented.
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From July 1st, India implemented Tax Deduction at Source (TDS), which has negatively impacted traders. This has caused the country’s overall cryptocurrency trading volume to plummet, as witnessed by most exchanges.according to Report, CoinDCX recorded a 90.0% drop in trading volume on July 3. For BitBNS, it fell about 37.4%.
Data from CoinGecko showed that trading volumes stabilized slightly after falling to lows. However, the average record shows a 56.8% drop in transaction volume.
The most prominent cryptocurrency traders are currently on the verge of recent events in the Indian cryptocurrency market. One of the traders, Shounak Shetty from Mumbai, disclosed his opinion on the new 30% tax on income and TDS.
On July 4, Shetty said such a rule would harm the country’s visionary talent. Shetty mentioned that he is now seriously considering the profitability of sticking with Indian exchanges. To him, other places like Dubai seem more attractive and more conducive to higher yields.
Record revenue for crypto exchanges drops sharply
Low trading volumes have significantly reduced the overall revenue of Indian exchanges. On July 4, the country’s YouTube channel Crypto India tweeted that under the 0.1 percent transaction fee, most exchanges would only be able to earn a small amount. The total daily funding of Zebpay, WazirX and CoinDCX is $21,649 volume Levels hit lows.
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Some leading exchanges, such as WarizX, CoinDCX, BitBNS, and Zebpay, saw their average daily volume drop. As of July 4, the value was $5.6 million, compared to $9.6 million in June.
Anuj Chaudhary, a policy analyst at WazirX, explained in an explanation that the 1% TDS covers all virtual assets. Chaudhary explained it on YouTube on June 30 on The WazirX Show. Assets listed include cryptocurrencies, NFTs, Metaverse, or other transactions executed on public blockchains.
However, there are very few tax exemptions. These include gift cards, bonus points and mileage points for discounts or merchandise. Others are subscription cards for websites, apps, platforms, and incentives, regardless of money.
Featured image from Pexels, chart from TradingView.com