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Almost a quarter of all respondents are considering converting their trading to international. (Image Reuters)
The survey, which involved approximately 10,000 respondents, was conducted by WazirX and Zebpay, two of the country's most popular cryptocurrency exchange platforms.
A survey has found that the frequency of cryptocurrency transactions is decreasing due to the cryptocurrency tax regime designed by the Indian government for digital assets. The survey, which involved approximately 10,000 respondents, was conducted by WazirX and Zebpay, two of the country's most popular cryptocurrency exchange platforms.
The two platforms have teamed up to launch a Trader Sentiment Survey that includes only traders who actively traded from the beginning of 2022 until April 15th. According to the survey, a whopping 83% of all respondents experienced obstacles to their trading activities.
Almost a quarter of all respondents are considering converting their trading to international. 29% of all respondents said trading activity had decreased since the government introduced a new tax enforcement system for cryptocurrencies.
The Treasury has decided to impose a 30% tax on all virtual digital assets sold for profit from April 1. The decision was announced by Finance Minister Nirmala Sitharaman in her Union Budget speech. The survey found that 27% of traders sold more than 50% of their cryptocurrency portfolio before April 1.
The survey also suggests that if current trends continue, governments will lose revenue from tax collections on cryptocurrency assets, as 27% of respondents said the new tax policy would result in lower trading volume than before taxes. Among traders, the hardest hit were those in the 18-35 age group.
“This investigation illuminates the need to reform certain conditions to ensure that tax regulations support inclusive growth of traders and holders in the cryptocurrency market,” Rajagopal Menon, Vice President at WazirX, said in a statement. “The tax system needs to be balanced to encourage participation and revive trading volumes,” he added.
“These results indicate that a significant number of respondents intend to reduce transaction frequency and engagement in the category,” said Avinash Shekhar, CEO of Zebpay. Shekhar said restrictive policies act as “a barrier to both adoption and innovation.” “Cryptocurrencies are driving revolutionary change around the world, and it is in our country’s interest to encourage participation, not discourage it,” he said.
According to media reports, the government is considering levying 28% GST on cryptocurrency activities such as sale-buy, cryptocurrency mining, and services provided by cryptocurrency exchange platforms.
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