High taxes pushing investors out of crypto space? Well that's just tip of the iceberg

economictimes.indiatimes.com:

crypto market in India, which attracted a big chunk of new and amateur investors in 2021, is suffering from a lack of trading volumes in 2022 due to a number of factors. The government implemented 30 per cent flat taxation in gains from the sale of crypto assets from April 1, 2022, and levied one per cent TDS on all crypto transactions since July 1, 2022. Market participants believe that despite a panic among the crypto investors, the froth has settled, and high tax rates are now sinking in among the traders. However, the unwillingness may not end anytime soon. Punit Agarwal, Founder and CEO, KoinX, said that the taxation framework was not something that a crypto investor in India was expecting. For the trader that works on small percentage margins, the TDS has been reducing the volume of the funds.

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«This is not the only reason for it,» he said. «There have been a lot of factors that have resulted in the downfall of the crypto industry in India, including geopolitical worries, rate hikes by the US Fed and recessionary fears,” he added. Pratik Gauri, Co-founder & CEO, 5ire, believes that more than the tax regime, it is the complexities and the calculation of taxes on VDAs, that people are scared of. He also blamed the prohibition of setting off losses in one crypto against gains in another as a concern. Back home, amid the lack of regulations, traders have been sceptical of the digital asset class following the regulatory actions on