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Crypto Trading Volume Declines in India Due to New Tax Rules 

The new crypto tax rules became fully operational on April 1 following the country’s parliament-approved Finance Bill 2022. In accordance with the new bill, a flat tax of 30% now applies to crypto income with no deductions or loss offsets allowed.

On April 1, crypto exchanges in India began seeing sharp declines in trading volumes. Aditya Singh from the Youtube channel  “Crypto India,” posted screenshots on Twitter that showed the quick decline in trading volume across four major cryptocurrency exchanges in India: Coindcx, Bitbns, Zebpay, and Wazirx.

Following the tweet, a user identified as Shivam Chhuneja commented; 

“Our government must think about taxation rules that bolster the industry and their tax revenue at the same time. Many people earn their living from crypto trading.”                                                                         

The Ministry of Finance in India clarified in Lok Sabha – the lower house of parliament – last week that “no deduction in respect of any expenditure (other than the cost of acquisition) or allowance is allowed.” Furthermore, losses incurred from crypto transactions cannot be nullified against gains.

  The co-founder and CEO of crypto trading platform Coinswitch, Ashish Singhal, commented:

RELATED: India Reprimands 11 Crypto Exchanges Accused Of Evading Tax

“A flat 30% tax that does not differentiate short-term capital gains from long-term gains, with no provision for deducting expenses incurred or offsetting losses is not in tune with the tax framework for other asset classes and is discriminatory”.

Crypto supporters across India have raised petitions on Change.org urging the government to introduce fairer and reasonable crypto tax policies. At the time of writing, the petition has accumulated more than 103K signers.

On July 1, another damaging tax provision is set to be put into effect – a policy in which 1% tax deducted at source (TDS) will be imposed on crypto transactions. However, a member of the Indian Parliament recently gave insights on why these measures could be detrimental to the crypto industry within India and beyond.

About Godwin

Godwin is a multi-faceted writer. He covers the latest and most significant news in the crypto industry for Newsbsc. Aside from his work here, he writes exceptional SEO optimized web contents for other websites in different sectors.

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