Crypto Tax Impact: Trading Volumes on Indian crypto exchanges drop

Cryptocurrency trade volumes on Indian exchanges have dropped following the implementation of the new crypto tax law. As per the provisions of the new tax law, a flat 30 per cent tax has been levied on all gains arising via virtual digital assets, including cryptocurrencies. Moreover, no deductions, set-offs or carry forwards are allowed.

As per data from Nomics, a cryptocurrency data compiler, trading volumes on Indian crypto exchanges like CoinDCX, WazirX and ZebPay have seen a steep decline after April 1.

The data compiled by Nomics showed that trading volumes on CoinDCX showed high peaks in the past week in the period between April 30 and April 31 and then showed a steep decline, as shown below.

In the past week, as per data compiled by Nomics, cryptocurrency exchange WazirX also peaked in terms of trading volumes on April 30 and April 31, the last two days of the old tax provisions, wherein cryptocurrency profits were taxed as capital gains.

Crypto exchange ZebPay observed a steep hike in trading volumes on April 31, the trade volumes fell considerably from April 1, as shown in the data below.

It is also noteworthy to mention that similar data was shared by crypto influencer Aditya Singh, who goes by @CryptooAdy on Twitter.

Besides the 30 per cent tax on gains, India's Finance Minister had also announced that all digital-asset transactions surpassing a certain threshold would be subject to a 1% tax deducted at source, or TDS, beginning July 1. 

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