According to statistics released by Crypto research firm CREBACO, transaction volumes on India’s leading Cryptocurrency exchanges fell by 55% in the first two days after the Crypto tax went into force on April 1st, while site traffic fell by 40%.
Furthermore, on March 31 and April 1, WazirX volumes plummeted from over 7 crore to 4 crore, CoinDCX from 1.9 crore to 1.2 crore, Zebpay from 1.5 crore to 44 lakhs, and Bitbns from 1.1 crore to 96 lakhs, according to the statistics.
“Most Indian Cryptocurrency exchanges have seen a 10-30% drop in volume. People are still trying to figure out what the immediate and indirect consequences of new tax rules will be. It could take a few more weeks for people to figure out new tax-cut techniques,” said Sathvik Vishwanath, co-founder of bitcoin exchange Unocoin.
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Since April 1, retail investors and Cryptocurrency exchanges have had to pay a 30% tax on gains from virtual digital assets. Starting July 1, the government will impose a 1% TDS on these virtual assets. Furthermore, these investors will be unable to deduct their losses, which is generally a provision in other forms of assets, further compounding their problems.
“We weren’t expecting the volumes to plummet that dramatically.” But, rather than allowing the industry to expand, this will stifle it,” said CREBACO founder Sidharth Sogani. “Normally, the government imposes a hefty tax on a new product, then progressively reduces it. Crypto, on the other hand, is a global phenomenon with far-reaching consequences.”
WazirX had a trading volume of over $43 billion last year, while Coinswitch had 14 million users.
“It’s still too early to attribute it to the latest amendments. By the second or third week of April, we’ll know whether crypto taxes will have an influence on the industry or whether individuals will continue to trade and not be too concerned about the changes.” – Nischal Shetty, co-founder of WazirX, was quoted as saying,
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