Trading volume on Indian cryptocurrency exchanges fell by 63% following the introduction of a new 1% ‘withholding tax’ on transactions above Rs 10,000.
From July 1, buyers of digital assets are required to pay Tax Deducted at Source (TDS) if a single transaction exceeds 10,000 rupees ($127) or the total amount of transactions for the reporting period is more than 50,000 rupees ($661.79).
The peculiarity of paying TDS is that it is an indirect income tax, in which the fee is charged in advance, at the expense of the future income of the recipient at the time of the transaction. Tax base – debit transactions in excess of the established limit.
In this regard, there is a drop in trading volumes on the main crypto exchanges. According to the aggregator Nomics.com, the daily trading volume on the WazirX exchange has fallen by more than 63% since July 1, from $14.53 million to $5.36 million. In the same period, the trading volume on the CoinDCX exchange decreased by about 20% – from $2.62 million to $2.09 million.
The Indian authorities are systematically tightening the regulatory framework governing the circulation of digital assets in the country. So, from April 1, a tax on profits received from trading in digital currencies began to be levied in the amount of 30%.