KuCoin, a cryptocurrency exchange based in Seychelles, estimates that more than 115 million Indians have purchased cryptocurrency. This morning, KuCoin released the results of a survey predicting that by 2030, Indian cryptocurrency investments will be worth more than $241 million (around 1,900 crores).
Since the Union government of India declared a 30% capital gain tax across all earnings gained from trading cryptocurrency tokens, cryptocurrency investments in India have taken a knock. The new tax rate, effective as of April 1, applies even if an individual’s yearly income from crypto trading, which is considered ‘virtual digital goods,’ is less than the 2.5 lakh threshold below which they would not be subject to taxation.
Therefore, Indian crypto traders who utilize centralized exchanges like WazirX & CoinDCX will be subject to a TDS rate of 1% on all crypto token purchases exceeding 10,000.
Trading volumes on major Indian exchanges have clearly decreased with the implementation of new taxation policies on crypto trading. Crebaco Global, a group that studies the cryptocurrency market, reports that in April, the average daily trading volume on WazirX fell by 48% sequentially, from $47.18 million in March – $24.39 million.
The average daily trading volume on CoinDCX decreased by $28.2 million, or 28.2%, from March to April, from $13.11 million – $9.38 million.
After the TDS rule for cryptocurrency trading went into effect on July 1st, trade volumes dropped even further. Both WazirX & CoinDCX had significant drops in their average daily trading volumes from June to July this year, with WazirX seeing a drop from $9.68 million – $2.81 million & CoinDCX seeing a drop from $7.79 million – $1.82 million.