Indian crypto trading volumes slump following hefty taxes

cointelegraph.com:

Trading volume on three major Indian crypto exchanges plummeted 72.5% on average since July 1, when a 1% tax per transaction was enforced in the country.

The Tax Deducted at Source (TDS) came into effect on July 1 and appears to have negatively affected traders as exchange volumes dropped from 37.4% on BitBNS and 90.9% on CoinDCX by July 3. Volumes have stabilized slightly since hitting lows but are still down 56.8% on average, according to CoinGecko.

Indian YouTube channel Crypto India tweeted on July 4 that exchange revenues, based on a 0.1% trading fee, are abysmal due to the low volume levels. At the trough of volume levels, WazirX, CoinDCX, and Zebpay took in a combined $21,649 per day.

Indian Crypto exchange's trading volume have plunged by 90-95% , 3 months after new crypto laws became applicable. Based on current volumes - Exchanges are only able to generate trading fee revenue of $1000 to $3000 Max.Bitbns seems to be still doing well.Tough times ahead. pic.twitter.com/KNDbea9BCn

For now, crypto traders like Mumbai’s Shounak Shetty are also hurting. Shetty told Economic Times on July 4 that he believes the TDS and the 30% income tax on cryptocurrency trades in India will be detrimental to the talent base in the South Asian nation. He said,

WazirX’s Policy Analyst Anuj Chaudhary explained in the June 30 episode of The WazirX Show on YouTube that the 1% TDS is levied on “digital assets whether it’s NFT, crypto assets, metaverse, or any sort of transactions happening on top of public blockchains.”

The tax will be in effect for three months as a test to determine the impact it has on the market. While trading volumes are low now, policymakers want to see its results for a longer timeframe.

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