After the government made the law, the rule was made. Most Indian investors seem to have chosen to sleep through a long bear market. This is likely because they will have to pay taxes on their holdings twice in a row. Trade Cryptos stable coins, bitcoins, and other coins on the most trusted platform bitcoin-formula.org.
Leading Indian cryptocurrency exchanges WazirX and Zebpay asked about 9,500 active traders in the area what they thought about investing to find out more about how investors think. Because of TDS deductions, 83 percent of traders have cut back on how often they trade. This shouldn’t be a surprise.
TDS was also not paid by Indian investors who sold their shares before taxes started. More than 27% of investors, mostly from generation Y, sold at least 50% of their investments in the days leading up to April 1. But 57% of investors only sold less than 10% of what they had invested. Rajagopal Menon, Vice President of WazirX, had the following to say about this:
The poll results show that some things need to change to get more people in the country to invest in cryptocurrencies. Because of this, the economy would grow. So that more people can trade and do business, the tax system needs to be fair.
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If an Indian investor wants to avoid paying taxes, he or she may want to trade on an exchange outside of India. But it can be risky to do business on exchanges that don’t follow “Know Your Customer” rules and don’t have much or any control. The CEO of ZebPay, Avinash Shekhar, also said:
On Monday, Salman Khan, a Bollywood actor, put out the GARI token. It lost 83% of its value in just a few hours. Even though the price drop was called a “market event” by the GARI network, investors were not sure if it was really a draw event.
On July 1, the government of India put in place a strict new cryptocurrency tax that adds 1% to all cryptocurrency transactions. Since then, a lot less has been traded on the country’s cryptocurrency exchanges.
Since the law was passed, trades on the WazirX market in India have dropped by 68%. 83 percent fewer trades are happening on well-known exchanges in the country, like CoinDCX and ZebPay. Both of these exchanges are in the country. Since July 1, the number of trades on the Indian exchange Koinbazar has gone up by 7 percent, which is unusual for the market. Even with the recent increase, though, Koinbazar’s trading volume has been going down since February, when the Indian government first said it would tax cryptocurrencies. Koinbazar now handles $44 million instead of $100 million worth of cryptocurrency transactions every day.
Indian cryptocurrency investors and businesses have been saying for a long time that the tax is too high and could cause the cryptocurrency trading market in India to crash. This would cause crypto investors and businesses to leave for better places.
Sandeep Nailwal, who made the blockchain scaling platform Polygon and is one of the best-known crypto entrepreneurs in India, told Bloomberg in March that he wanted to live in India and help the Web 3.0 environment. Nailwal said, “I want to live in India and talk about the Web 3.0 ecosystem.” But since Polygon has grown so much and the laws aren’t clear, it doesn’t make sense for any team, including ours, to put their work at risk in the local area. It’s crazy that so many talented people are being lost.
In 2020, Nailwal and a few of his coworkers moved Polygon’s real headquarters from India to Dubai. India did this because they didn’t have clear rules about how to handle cryptocurrency. People have said that India, where Polygon was founded, is not where the company has an office.
If a lot of people leave the cryptocurrency market, it will hurt what has become the most active and largest cryptocurrency market in the world. This means that India has about four times as many users as the United States, which is in second place. India has more than 1.4 billion people, which may be why it has a high use rate.
But it also seems like a lot of people in the country adopt it. Chainalysis, a company that does research, made an index of how many people around the world used cryptocurrencies in the past year. India came in second. This index ranks 154 countries based on how much crypto they trade and other factors.
Because of a new law and a general drop in the value of cryptocurrencies, it might not be a good idea to trade them in India in the future. Because of the new cryptocurrency tax, the country is now one of the worst places to trade cryptocurrencies from a tax point of view.