A CoinSwitch spokesperson told Gadgets 360, “The crypto segment is an early-stage industry and has great potential. We have received queries from various government agencies. Our attitude has always been that of transparency.” It has been told in media reports that ED wants to know how crypto exchanges work in the country. CoinDCX and WazirX both claim to comply with the laws of the country and are ready to cooperate with law enforcement agencies. The crypto segment in the country is already facing difficulties due to the volatility of the market and the implementation of new tax rules. This investigation could further reduce trading volumes on these exchanges.
The trading volume of crypto exchanges CoinDCX, BitBNS, WazirX and Zebpay is reported to have dropped to around $5.6 million in the past few days. By June, this figure was about 10 million dollars. From April this year, a tax of 30 per cent on profits from Virtual Digital Assets (VDA) was implemented. Since then it has become difficult for crypto traders to make profits. A one percent tax cut on every crypto transaction from this month means that the purchase and deposit of cryptocurrencies will have to pay a one percent tax, adding to the pressure on investors.
The central government believes that a TDS of one percent on crypto transactions will make it easier to track these transactions. This TDS will be levied on VDAs including cryptocurrencies, non-fungible tokens (NFTs) and other metaverse elements. The crypto community has expressed outrage on social media over this additional financial burden. Finance Minister Nirmala Sitharaman recently said that no hasty decision will be taken regarding the law related to crypto. The Reserve Bank of India (RBI) last year asked for a ban on cryptocurrencies. However, the government says that it will not ban this segment completely.
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