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According to a study conducted by crypto exchanges WazirX and Zebpay, 83% of traders say that India’s 30% tax on the transfer of all cryptocurrencies and non-alternative tokens (NFTs) affects trading frequency. thinking about.
The survey shared with CryptoSlate included 9,500 respondents who actively traded between January 1st and April 15th, 2022. Respondents were divided into traders and holders. Holders were either traded several times a month or invested in the long term.
India enforced the tax on April 1, and shortly after the tax was enforced, there was an immediate drop in daily trading volumes on major Indian cryptocurrency exchanges. From its peak of $ 163.41 million on March 31, WazirX’s daily trading volume fell to $ 33.97 million by April 30, down more than 79%. According to data aggregator Nomics.com..
The 1% tax in force on July 1 made the daily trading volume even worse.
Rajagopal Menon, Deputy president WazirXSaid:
It is important to support the comprehensive growth of all stakeholders involved in regulation. The findings need to reform certain conditions to support the growth of crypto investors in countries that bring economic prosperity. It regulates gender.
The tax system needs to be balanced in order to encourage participation and revive trading volumes. “
The survey also found that 24% of respondents are considering moving their trading activities to international exchanges due to high taxes. However, WazirX founder and CEO Nischal Shetty said trading on international exchanges does not exempt traders from paying 1% tax, but the traders themselves are solely responsible for paying them. .. For a 30% tax, traders are expected to report transactions in their tax returns.
Approximately 29% of survey respondents said they had fewer transactions than they had before the tax came into effect. In addition, 34% of traders and 23% of holders refer to investors who hold crypto for long periods of time, saying that taxes will reduce trading.
In addition, the tax has led traders to rethink their holdings of cryptocurrencies. Twenty-seven percent of respondents said they had sold more than 50% of their portfolio by April 1, and 57% had sold less than 10% of their holdings.
Young investors were more affected than older investors, as 28% of respondents between the ages of 18 and 35 sold more than 50% of their holdings by April 1, according to a survey.
However, holders still expect the tax system to become more favorable over time, with 45% saying they will continue to invest.
ZebPay CEO commenting on findings Avi Nash Shekar Said:
Restrictive policies act as a barrier to both recruitment and innovation.
India’s cryptocurrency policy is a step forward, but rethinking certain aspects will help build a more supportive regulatory environment for stakeholders in all industries and ultimately overall economic development. Contribute to. “
Industry stakeholders say that as investors and crypto experts move to crypto-friendly jurisdictions, taxation can not only cripple India’s crypto economy, but also accelerate brain exhaustion. I’m warning you.
The government has begun taxing crypto transactions, but digital assets are still operating in the gray area of regulation. Many believed that taxes would justify the industry, but Finance Minister Nirmala Sitharaman said taxation would not legalize cryptocurrencies.
India’s cryptocurrency regulation bill, which was introduced by Parliament last year but was not submitted, has been postponed indefinitely. The Finance Minister said India will not close the door to cryptocurrencies, but central banks have consistently sought a total ban.
