New Delhi: Starting July 1, a TDS of 1 percent was imposed on cryptocurrencies in India. Cryptocurrencies are currently clubbed under virtual digital assets (VDAs) in the country, facing taxation of 30 percent on all gains, as part of the new tax regime that came into effect on April 1. This month, an additional TDS was slapped on crypto transactions. This has led to a worrying dip in trading volumes among leading crypto exchanges in the country, as per data from crypto data aggregator CoinGecko, as reported by Bloomberg.
As per CoinGecko data, WazirX, CoinDCX, and ZebPay suffered major declines in trading volumes within the range of 60 to 87 percent immediately after the 1 percent TDS went into effect. The report also noted that the Giottus crypto exchange saw a trading plunge of 70 percent.
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To put things into perspective, WazirX back in July 2020 would reportedly take less than two hours to see $3.8 million worth of trading. However, on July 2, WazirX saw trading of the same amount throughout an entire day after the TDS went into effect.
As per WazirX Vice President Rajagopal Menon, market makers and high-frequency traders were “gone” soon after the TDS kicked in. He added that traders are conducting more peer-to-peer trading and migrating to decentralised exchanges.
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