The tax laws have impacted not only KYC compliant exchanges in India but also the traders who use these exchanges to invest in cryptocurrencies.
According to WazirX and Zebpay, a majority of active traders are facing difficulties with the current tax regime, according to their Trader Sentiment Survey.
The above mentioned exchanges collectively performed the poll and included traders who were active between January 1 and April 15. The purpose of the study was to gauge the sentiment of dealers on the 30 per cent tax on digital asset gains.
The exchanges conducted a survey of 9,500 participants from across the nation.
The exchanges outlined the differences between traders and holders in the report. The study said traders were those who engaged in trading daily, more than five times per week, or at least twice per week. The following was concluded from the survey:
The report found that 83 per cent of traders think the existing tax system has made them trade less frequently.
As per 29 per cent of respondents, traders now trade less often than they did before the new tax regime was introduced from April 1.
27 per cent of respondents sold more than 50 percent of their holdings of cryptocurrencies before the start of the new financial year.
While 57 per cent of them realized profits on up to 10 per cent of their holdings, the rest did not.
The poll showed that younger traders and investors were affected more than their elder counterparts.
It is worth noting that the report did not take into account the 1 percent tax deducted at source TDS which became effective from July 1.
The finance minister, Nirmala Sitharaman, introduced 30 per cent tax on gains and 1 per cent TDS on transfers during the Union Budget in February.