Crypto trader profiles are changing with the new tax regulations
As the 1 percent TDS rules come into effect, crypto exchanges expect India's crypto investors to be HNIs rather than the existing high-volume, low-investment traders.
Indian crypto exchanges expect to see a different profile for crypto traders after the government announced a new 1 percent TDS tax on every crypto trade, a 30 percent tax on gains, and other rules that will come into effect from July 1.
Rather than the young, high-volume crypto traders, HNIs are expected to take up a larger portion of the pie.
While HNIs tend to invest much larger sums, they also drift towards safer coins such as Bitcoin or Ethereum, rather than the new projects that have seen growth in the Indian crypto ecosystem.
Additionally, HNIs also tend to hold their investments for longer, while the current ecosystem is well known for its large trade volumes and small investment sizes.
Speaking to Economic Times, Sathvik Viswanath, CEO of cryptocurrency exchange Unocoin, said, “There will be some small retail investors who would opt out of the crypto industry itself just because they would have the burden of filing their returns by the end of the current financial year.”
He added, “HNI investors have clarity now as compared to youngsters.”
Meanwhile, Nishcal Shetty of created a Twitter thread on the dangers of the 1 percent tax in March, while Ashish Singhal of posted an entire rebuttal of the new laws at the beginning of the new financial year.
Singhal's criticisms include the higher per trade TDS for the required aim of tracing crypto trades. Moreover, he said, a 30 percent tax on cryptos is unfair to investors without the deductions provided to stock market investors, and Indians have already spent $6 billion on cryptos, which is now at risk.
Singhal added that promoting the crypto ecosystem would be "in pace with the government's mission of Atmanirbhar Bharat."
Ram Mohan Naidu, the MP from Srikakulam, Andhra Pradesh, also posted on his Twitter last week about meeting Singhal and Sumit Gupta of to talk about regulations from a private and public perspective to improve the local crypto ecosystem.
However, despite these complaints and the progress made by the industry and the government, Nischal reflected the opinion of the ecosystem when tweeting about how the entire episode feels like a joke.
He wrote on Twitter, "The new crypto tax law imposed in a country with the largest youth population is hard to believe. Most people want to think it’s an April Fool’s joke by the Indian government."
Edited by Suman Singh
MOST VIEWED STORIES
