According to one of India’s unicorns, CoinDCX, a domestic exchange valued at over $2 billion before the imposition of the tax, which crushed digital-asset trading in India, the tax has proven counterproductive and should be reduced.
The country imposed a 1% TDS tax on cryptocurrency transactions sixteen months ago, claiming that the purpose was to monitor purchases and sales rather than generate income. However, as per CoinDCX Chief Executive Officer Sumit Gupta, the charge sent 95% of Indian trading volumes onto foreign platforms, which is challenging for local authorities to regulate.
“The whole purpose of the TDS was to track and trace transactions but that is getting defeated,” Gupta stated in an interview, adding that he anticipates the government will eventually reduce the crypto tax in India as it recognizes the issue.
The charge reduced liquidity and discouraged trade, causing market makers to withdraw from Indian exchanges owing to increased expenses. Even if a Bitcoin recovery from 2022’s cryptocurrency meltdown helps volumes globally, local platforms are still uncertain.
India has demanded that multilateral institutions assist in a globally coordinated approach to crypto regulations. Gupta stated that after the country’s general election in 2024, he expects greater regulatory certainty by the end of 2025.
In April of last year, CoinDCX disclosed a $135 million investment round led by Pantera Capital and Steadview Capital Management LLC, valued at $2.15 billion..