Search
India’s crypto tax pushing traders to foreign exchanges
January 04, 2023
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:
- 4-IN-1 Professional Diploma in Banking, Financial Services & Insurance (PDBFSI): https://tscfm.org/courses/4-in-1-professional-diploma-in-banking-financial-services-insurance-pdbfsi/