Cryptocurrency trading is slowing down due to cryptocurrency tax Regulations set by the government India For digital assets, a survey revealed. Nearly 10,000 people participated in the survey, and the survey was conducted by WazirX and Zebpay, two of the most notable Cryptocurrency exchange platforms in the country.
The platforms have teamed up to launch a Trader Survey, which only included traders who were actively trading from the start of 2022 until April 15th. The survey revealed that up to 83 percent of the total respondents had experienced a disruption in their trading activity.
Almost a quarter of respondents are considering switching their trade to international exchange. Twenty-nine percent of all respondents said their business activity has decreased since the government introduced the new tax enforcement system for cryptocurrencies.
The Ministry of Finance has decided that all virtual digital assets sold at a profit will attract a 30 percent tax, starting on April 1. This decision was announced by Finance Minister Nirmala Sitharaman, during the Union Budget Address. The survey showed that 27 percent of traders sold more than 50 percent of their crypto portfolio before April 1.
The survey also suggested that, in line with the current trend, the government will lose revenue from tax collection from crypto assets because 27 percent of all respondents said they would trade less than the pre-tax period due to the new tax policy. The hardest hit among the traders were people between the ages of 18 and 35.
Rajagopal Menon, Vice President of WazirX, said in a statement that the survey “provides the need to reform certain conditions” so that tax regulations support the inclusive growth of traders and stockholders in the cryptocurrency market. “The tax system must be balanced to encourage participation and revive trading volumes,” he added.
“The results indicate that a significant number of respondents intend to reduce their trading frequency and participation in this category,” said Avinash Shekhar, CEO of Zebpay. Shekhar stated that restrictive policies act as a “barrier to both adoption and innovation”. “Crypto is driving revolutionary change around the world and it is in our nation’s interest to encourage participation, not deter it,” he said.
According to media reports, the government is also considering imposing a 28 percent GST on crypto activities such as buying and selling, cryptocurrency mining, and services offered by cryptocurrency exchanges.