India: The full scope of what’s actually in store for exchanges after 1%TDS

ambcrypto.com:

The 30% crypto income tax policy came into effect in India in February 2022. The country’s finance minister Nirmala Sitharaman described the tax law as another step toward positive crypto regulations. However, local investors didn’t see eye-to-eye nor showed the same enthusiasm. Many investors/traders censured this move.

Incredible India!! 

Indian crypto traders/investors face a hefty fee structure on their crypto acquisitions. Keeping in mind the 30% income tax regime, cryptocurrency exchanges at the moment have come under added pressure from the additional 1% tax that went into effect on 1 July. These developments have directly affected the trading volumes on Indian cryptocurrency exchanges.

Three Indian exchanges suffered declines of 60% and 87% in the value of daily trading immediately after the 1% tax deductible at source became effective from 1 July. Organizations including ZebPay, WazirX, and CoinDCX have suffered the consequences. A fourth, Giottus, witnessed a trading sink of 70% as per the 5 July Bloomberg report.

Here’s the graphical representation:

Source: Bloomberg

The report further added:

“Those steep declines came from already depressed trading levels, as a combination of plunging prices, unfavorable tax treatment and difficulty getting cash onto exchanges combined to depress the once-hot market.”

In addition, WazirX Vice President Rajagopal Menon shed more light on situation. Long-term crypto holders buying and selling, but ‘market makers and high-frequency traders gone. Traders are also doing more peer-to-peer trading and migrating to so-called decentralized exchanges,’ he stated.

Different leaders from exchanges tooraised similar concerns in a 4 July AMBCrypto article. Furthermore, the respective government