Indian Crypto Exchanges See Sharp Drop In Transaction Volume

Indian crypto exchanges see a sharp drop in transaction volume after a 30% tax on profit and 1% TDS are making the new taxes exorbitant so let’s read more in today’s latest crypto news.

Since the new crypto tax came into effect just a few days ago, the Indian crypto exchanges see a sharp drop in transaction volume, and in the final days of March, they witnessed a moment of panic selling. Sharing volume graph of the four leading exchanges ZebPay, BITBNS, CoinDCX, and WazirX all tweeted that they saw a drop in volume after the new crypto tax rules became applicable. The reports by rating firm CREBACO global said that the transaction volume and domain traffic at Indian crypto exchanges dropped by 55% and 40% respectively. The CEO of CREBACO Global Sidharth Sogani added:

“We observed a drop in volumes by up to 55 percent compared to the volumes in March-end, and also a drop of over 40 percent in domain traffic on Indian exchanges.”

WazirX saw the domain traffic decline from 70 million to 40 million, ZebPay from 15 million to 4.4 million, CoinDCX from 19 million to 12 million, and BitBNS from 11 million to 9.9 million. Over the past week, the local media was voicing concerns that the new crypto taxes could drive smaller investors away from the centralized exchanges to the decentralized exchanges and terminate the latter as a grey market. Introduced through Budget 2022-23 the Indian government levied a 30% tax on profits and 1% TDS on crypto transactions. What makes it even more painful for investors is that the losses on one asset can’t be offset against the profits of another coin. The experts feel that these provisions will make the crypto market uncompetitive and the country could lose its edge.

The tax provisions became effective from the start of the new financial year and they were presented as part of the Annual Budget in the Indian Parliament in early February this year which generated quite the debate with some lawmakers calling for a favorable environment for the industry while others demanded a more stringent regime. What makes the taxes worrisome is the lack of regulation which makes dealing in digital assets quite risky. The government said that it wants to wait for a glboal consensus and emerge on regulation issues before it comes up with its own.