Since the new tax law took effect on April 1, trade volumes on cryptocurrency exchanges in India have decreased by 15% to 55 percent. Analysts also predict that the implementation of a 1% tax deducted at source law on July 1 will have an impact on liquidity.
According to reports, since the new tax legislation took effect, cryptocurrency exchanges in India have seen significantly reduced traffic.
According to industry analysts and academics, trading volumes dropped 15%–55 percent in the first three days of April, according to local media agencies. Domain traffic on Indian cryptocurrency exchanges has also decreased by 40%.
Aditya Singh, the co-founder of Crypto India, also showed a graph of how trade has decreased in his tweets. Trading activity on WazirX, one of India’s most prominent crypto exchanges. Of course, dropped to less than $100 million from $208 million at the start of the month.
Indian individuals would now have to deal with stringent tax laws that take a 30% share of any gains made in the cryptocurrency market. In addition, a 1% tax is deducted at the point of sale for each transaction. Investors are also not permitted to offset their losses with gains made by other traders.
The tax deducted at source rule takes effect on July 1, but investors are already scratching their heads. Executives anticipate that this will have an impact on market liquidity. That’s, as regular traders would restrict their activity in order to prevent losses. This guideline is the one that has the industry concerned about the state of cryptocurrency.
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