dropped by up to 72 percent.
According to statistics compiled by Crebaco, a cryptocurrency research group, crypto trading volumes on India's major exchanges have plummeted since April 1, the day the new tax law went into force.
The volumes of four Indian exchanges were compiled using data from Coinmarketcap and Nomics, a data business. The numbers show a 72 percent reduction in WazirX, a 59 percent drop in ZebPay, a 52 percent drop in CoinDCX, and a 41 percent loss in BitBns. The trades were conducted in US dollars.
India's crypto tax law, which imposes a 30% tax on earnings from crypto transactions, went into effect on April 1, 2022, and does not allow for the deductibility of losses from previous crypto transactions. The most contentious component, the 1% tax deducted at source (TDS) obligation, will not go into effect until July 1.
It is unclear if the decline in trading volumes is due to the new tax law, and data shows that the drop in volumes on Indian exchanges is broadly consistent with the worldwide trend.
Crebaco's Sidharth Sogani stated that the data was collected by analyzing four to five transactions using credible data.
"April 1st, 2nd, and 3rd were all holidays." Volumes have continued to plummet since then. I don't think this will happen again. This has set a new standard. It may move farther down or sideways, but it is unlikely to return to the top. The new tax has clearly had a detrimental impact on the market.
"The government must investigate this, and because there is no way to stop it (crypto), the government must welcome the technology," he added.
According to leading cryptocurrency lawyer Suril Desai, it is unclear if the dip in numbers indicates that trade has decreased or gone elsewhere. "The only trade volumes we receive are from exchanges." "Off-chain deals may be taking place for which there is no record," Desai explained.
ZebPay stated that they "would not be responding," while other exchangers did not respond to requests for comment before press time.
According to Sathvik Vishwanath, co-founder, and CEO of Unocoin, another big Indian exchange, the new tax law is having an impact on the market.
"People earning less than $1,000,000 per year are subject to a 30% fixed income tax on cryptocurrency." TDS of 1% has an impact on market makers and liquidity providers. "Both are required for a more robust crypto environment in India," Vishwanath tweeted.
