large scale image
LCP Image

Back to TSCFM News

India’s crypto tax pushing traders to foreign exchanges

January 04, 2023

India’s crypto tax pushing traders to foreign exchanges
India’s tax rules on crypto, which went into effect last April, has resulted in local exchanges ceding the lion’s share of the market to those operated by foreign players, according to a new report.

Binance, Coinbase and other foreign exchanges commanded 67.6% of the crypto market share in India as of October 2022, up from 50% in November 2021, according to New Delhi-based think tank Esya.

During the period between February 2022, when India unveiled its crypto taxation policy, and October 2022, $3.8 billion of trading volume shifted from domestic centralized exchanges to those operated offshore, the report said (PDF).

Indian exchanges including WazirX, CoinSwitch and CoinDCX lost a whopping 81% of their trading volume in four months between July and October, Esya said, attributing the trend to the local TDS rules.

India is among the nations that has taken a stringent approach at cryptocurrencies. It began taxing virtual currencies in April last year, levying a 30% tax on the gains and a 1% deduction on each crypto transaction.

The report argues that traders are moving to foreign exchanges because they believe they will be able to mask their activities from the local authorities. Many of the foreign exchanges, including Binance, offer a peer-to-peer on-ramp and off-ramp ability, allowing users to avoid having to make transactions to a business.

Important Links:

Recommended for you ...

Modi, Mauritius, and Sri Lanka Leaders Unveil Digital Payment Services
Modi, Mauritius, and Sri Lanka Leaders Unveil Digital Payment Services

February 12, 2024

Public Sector Banks Surpassing Private Peers, Investors Reconsidering Choices
Public Sector Banks Surpassing Private Peers, Investors Reconsidering Choices

February 12, 2024

Indian Banks Seek RBI Permission for Global Bond Trading Ahead of Inclusion in Indices
Indian Banks Seek RBI Permission for Global Bond Trading Ahead of Inclusion in Indices

February 12, 2024

Enquire Now
REQUEST A CALLBACK
Chat on WhatsApp