A Trader Sentiment Survey with about 9,500 responses has been launched by Zebpay and WazirX, the largest cryptocurrency exchange in India. Only traders who had engaged in active trading from the start of the year to April 15th, 2022, were included in the responders.
The Findings of the Study
The research showed that 83% of traders thought the latest tax change reduced their trading frequency. Additionally, due to the high taxation, almost 24 percent of respondents are considering moving their trade to international exchanges. Furthermore, compared to the pre-tax period, just 29% of respondents traded less.
According to the study, 27% of respondents sold more than 50% of their portfolios before April 1st, while 57% sold less than 10%. In the current scenario, the government’s revenue from tax collections will decrease because 27% of customers (including 34% traders and 23% holders) claimed they would trade less than before due to the current taxing policy.
Participants in the poll were traders and holders. While the holders were individuals who traded sporadically throughout the month or had long-term investments, the traders were those who traded daily, more than five times per week, or at least twice per week.
What Are the People at Companies Saying?
Rajagopal Menon, Vice President of WazirX, responded to the survey results by stating, “It is our mission to put India at the forefront of the crypto revolution by constantly innovating and building the most secure, dependable, and user-friendly platform and helping the industry develop a regulated ecosystem.
The rules must, however, encourage the inclusive development of all parties concerned. According to the survey results, some conditions need to be changed to encourage the rise of cryptocurrency investors in the nation, which would lead to economic prosperity. To boost trading volumes and promote participation, the tax system must be balanced.”
According to the report, millennials were more negatively impacted than their senior counterparts. Twenty-eight percent of the respondents between 18 and 35 sold more than half of their holdings before the start of April. To take advantage of a more favorable tax environment, 23% of investors wanted to transfer their shares to foreign exchange.
In terms of investors becoming victims of international exchanges that aren’t KYC compliant, this emigration offers a serious concern. In addition, 40% of the affected traders had already sold more than 50% of their assets before April 1st.
The CEO of ZebPay, Avinash Shekhar, responded to the survey results by saying, “The results indicate a significant proportion of respondents want to lower their trade frequency and involvement in the category. Crypto is bringing about revolutionary change, and our country should promote involvement rather than discourage it. Adoption and innovation are both hampered by restrictive regulations.
Although India’s crypto tax policy is a step in the right direction, some aspects should be given another look in order to create a more accommodating regulatory environment for all industry participants and, ultimately, advance the nation’s economy.”
With 45% declaring they would keep their posts, the holders had continued to hang onto them. This demonstrates their confidence that the long-term tax provisions would be improved.
India imposed a 30 % tax on crypto profits at the start of the year. Recently, another 1 % TDS was also slapped on all crypto-related transactions.