BENGALURU: The current crypto tax structure may lead to a loss of Rs 99.3 lakh crore of local exchange trade volume in the next four years, says a report. Following the announcement of a 30% tax on virtual digital assets (VDAs) in February 2022, domestic crypto exchanges lost 15% of their trading volumes in two months (February and March 2022).
The trade volume of about Rs 32,000 crore was shifted from domestic VDA exchanges to foreign ones during February-October 2022, said think-tank Esya Centre in its report.
The total trade volume contributed by Indians on foreign centralised VDA exchanges was Rs 80,000 crore between July and October 2022. While domestic exchanges lost 15% volumes in February and March 2022, they lost another 14% between April and June 2022. The government announced 1% TDS on crypto transactions from July 1.
Due to this, Indian exchanges lost up to 81% of volumes between July and October 2022. After the 30% tax announcement in February, 17 lakh users switched to foreign exchanges. “VDA adoption by Indians as measured by mobile app downloads fell by a sizable 16% on a month-on-month basis for domestic exchanges.”