Connect with us
Active Currencies 14512
Market Cap $2,697,026,198,311.30
Bitcoin Share 49.74%
24h Market Cap Change $-2.66

India: The full scope of what’s actually in store for exchanges after 1%TDS

2min Read

Share this article

The 30% crypto income tax policy came into effect in India in February 2022. The country’s finance minister Nirmala Sitharaman described the tax law as another step toward positive crypto regulations. However, local investors didn’t see eye-to-eye nor showed the same enthusiasm. Many investors/traders censured this move.

Incredible India!! 

Indian crypto traders/investors face a hefty fee structure on their crypto acquisitions. Keeping in mind the 30% income tax regime, cryptocurrency exchanges at the moment have come under added pressure from the additional 1% tax that went into effect on 1 July. These developments have directly affected the trading volumes on Indian cryptocurrency exchanges.

Three Indian exchanges suffered declines of 60% and 87% in the value of daily trading immediately after the 1% tax deductible at source became effective from 1 July. Organizations including ZebPay, WazirX, and CoinDCX have suffered the consequences. A fourth, Giottus, witnessed a trading sink of 70% as per the 5 July Bloomberg report.

Here’s the graphical representation:

Source: Bloomberg

The report further added:

“Those steep declines came from already depressed trading levels, as a combination of plunging prices, unfavorable tax treatment and difficulty getting cash onto exchanges combined to depress the once-hot market.”

In addition, WazirX Vice President Rajagopal Menon shed more light on situation. Long-term crypto holders buying and selling, but ‘market makers and high-frequency traders gone. Traders are also doing more peer-to-peer trading and migrating to so-called decentralized exchanges,’ he stated.

Different leaders from exchanges too raised similar concerns in a 4 July AMBCrypto article. Furthermore, the respective government also banned offsetting losses on such assets, treating them differently from stocks and bonds. Ergo, the exodus doesn’t come as a total surprise. It is in fact a way to curb further reductions.

What’s the ‘hullabaloo’

That’s exactly what Sumit Gupta, CEO of CoinDCX had asked about in a series of tweets discussing the ongoing development. Here, Gupta asked the government to ‘rethink this decision’.

In fact, by implementing 1% TDS on every trade, the Indian government would lose out on a massive profit margin.

Lastly, he also questioned the main motive behind the implementation of the said TDS. He said:

“Tracking transactions can be done in other ways too. Is TDS really the right solution? Or will it create more problems? Something to think about?”



Shubham is a full-time journalist/ Crypto data analyst at AMBCrypto. A Master's graduate in Accounting and Finance, Shubham's writings mainly focus on the cryptocurrency sector with particular emphasis on market research studies and communications for >2 years. Also, a die-hard Chelsea fan #KTBFFH.
Read the best crypto stories of the day in less than 5 minutes
Subscribe to get it daily in your inbox.
Please check the format of your first name and/or email address.

Thank you for subscribing to Unhashed.