Crypto Trading Volume Nosedives in India Days After Tax Rule Implemented: Crebaco

As per the Crebaco report, several crypto exchanges in India have observed a decline in trading activities.

By Radhika Parashar | Updated: 11 April 2022 18:45 IST

Crypto Trading Volume Nosedives in India Days After Tax Rule Implemented: Crebaco

Photo Credit: Pixabay/ QuinceCreative

India’s crypto tax has been a reason of conflict among members of the Indian crypto community

Highlights

India still has no official cryptocurrency
India’s tax laws demand 30 percent of profits made via crypto trading
India’s crypto community has asked for lower tax rate

The volume of cryptocurrency trading in India has taken a hit after tax laws for digital assets went into effect on April 1. CoinDCX and WazirX among other Indian crypto exchanges have witnessed a significant drop in crypto trading volumes, a report released by Mumbai-based research firm Crebaco has claimed. As announced by Finance Minister Nirmala Sitharaman, a 30 percent tax is being deducted from all profits generated via crypto trading in the nation. The tax laws also instruct Indian crypto users to pay one percent TDS on each crypto transaction.

“April 1, 2, and 3 were holidays. Since then volumes are continuing to fall. It can go further down or sideways but it is unlikely to go back up. It is clear that the new tax has impacted the market negatively. The government must look into this and because there is no way to stop this (crypto), the government should embrace the technology,” Coindesk quoted Sidharth Sogani, the founder and CEO of Crebaco as saying.

The trading volumes on WazirX, ZebPay, CoinDCX, and BitBns have dropped down by 72 percent, 59 percent, 52 percent, and 41 percent respectively, the report says.

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Sogani has reportedly claimed the information surfacing in this report was compiled by analysing various crypto exchanges operating in the nation.

Since its announcement earlier in February, India's crypto tax has been a reason of conflict among members of the Indian crypto community.

While several industry experts and crypto enthusiasts have lauded the government for taking a ‘regulate-over-restrict' approach towards the high-risk asset class, others have asked for a lower tax on crypto incomes.

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On April 10, Sathvik Vishwanath, the CEO of Indian exchange UnoCoin had tweeted that investors from the middle-income category in India are suffering due to India's tax laws on virtual assets.

People earning less than 10L per year is affected by 30% fixed income tax on crypto. 1% TDS is affecting the market makers and liquidity providers. Both are needed for better crypto ecosystem in India.#reducecryptotax #faircryptotax Day-68 #IndiaWantsCrypto @Unocoin
— Sathvik Vishwanath (Unocoin) (@sathvikv) April 10, 2022

On Twitter, #ReduceCryptoTax has been making it to the India trends list for some time now.

#India is ranked second in @chainalysis' 2021 Global #Crypto Adoption report. This goes to show our collective excitement about this asset class. Unfortunately, India's high crypto tax rates will deter people from investing in it. So we must #reducecryptotax. #IndiaWantsCrypto pic.twitter.com/0Trymqfm8a
— Bitbro (@bitbrocrypto) April 11, 2022

10 years from now USA, Dubai, Singapore will be the Hub of Blockchain development and India will be the hub of talented blockchain developers working for Rs.25000/month in TCS, Wipro, Infy :innocent:#reducecryptotax
— Neel (Crypto Jargon) (@Crypto_Jargon) April 6, 2022

Tax can be a way of promoting innovation in new fields or it can be the sword that kills innovation completely. We must figure out what we want.#reducecryptotax
— Shivam Chhuneja (@shivamchhuneja) April 9, 2022

Crypto industry insiders had earlier expressed fears of an investor exodus post the enforcement of tax laws on virtual assets in India.

The government of India, has however, maintained its stance that the laws have been brought in to curb the potential exploitation of virtual assets.

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Further reading: Cryptocurrency, India, Crypto Tax, WazirX, CoinDCX, ZebPay, BitBns, Crebaco

Radhika Parashar

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Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More