Trading frequency down; tax laws impact young crypto traders: Traders Sentiment Survey 

The recently introduced tax laws have impacted not just KYC compliant crypto exchanges operating in India but also crypto traders who use these exchanges to invest in cryptocurrencies. 

Crypto exchanges WazirX and Zebpay claim based on their Trader Sentiment Survey, that a majority of active crypto traders are facing difficulties with the current tax regime.  

The aforementioned crypto exchanges performed the poll collectively and included traders who were active between January 1 and April 15. The purpose of the study was to gauge the sentiment of crypto dealers on the newly implemented 30 per cent tax on crypto and other virtual digital asset gains. 

The survey conducted by the exchanges comprised approximately 9,500 participants from across the nation. 

The exchanges outlined the distinction between traders and holders in the report. The study described traders as those who engaged in trading daily, more than five times per week, or at least twice per week. Conversely, holders are long-term investors. 

The following was concluded from the survey: 

The report found out that 83 per cent of the 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 prior to the new tax regime kicked in from April 1. 

Further, 27 per cent of respondents sold more than 50 per cent of their cryptocurrency holdings before the start of the new financial year. 

While 57 per cent of them realised profits on up to 10 per cent of their holdings, rest did not. 

The poll revealed that younger traders and investors were affected more than their elder counterparts. 

It is worth noting that the report did not take into consideration the 1 percent tax deducted at source (TDS) which became effective from July 1. 

The finance minister, Nirmala Sitharaman, introduced both 30 per cent tax on crypto gains and 1 per cent TDS on crypto transfers during the Union Budget in February. 

Also Read: All you need to know about TDS on cryptos in 5 points     - BusinessToday

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