India’s Tough Crypto Tax Rules Is Helping Binance A Lot, Here’s How

Bhushan Akolkar
September 14, 2022
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India’s crackdown on the cryptocurrency market over the last year is helping foreign exchanges at the cost of local exchanges. As per the latest reports, crypto exchange Binance is expanding its footprint in the Indian market.

This happens as Indian crypto traders flee to foreign exchanges to avoid the hefty 1% TDS on crypto transactions. This 1% tax comes atop the 30% tax made on crypto gains. During the last month of August 2022, the downloads for the Binance app jumped to 429,000, as per data from market intelligence firm Sensor Tower.

India’s steep taxes and difficulty in moving funds have pulled Indian crypto investors towards Binance. Since the 1% tax came into effect in July, the daily transaction volumes on the Indian crypto exchange tanked by 90%. On the other hand, foreign peers of Indian exchanges have been making strong expansions in India.

This is because exchanges like Binance and FTX haven’t been deducting taxes on crypto transactions. Thus, it is serving as a strong catalyst for Indian investors to flee to foreign exchanges. Rohan Misra, chief executive officer at SEBA India told Bloomberg:

“The recent tax regulation is not explicitly clear on whether the 1% tax deducted at source extends to crypto derivatives transactions involving futures, as it does to crypto spot transactions”.

A Binance spokesperson said that they are currently monitoring the situation and will make further announcements in due course.

Binance’s Spat With WazirX

Binance entered into a spat with India’s most popular crypto exchange WazirX following an ED investigation. While WazirX claimed to have the support of Binance, the latter distanced itself from it. This caused WazirX customers to flee to Binance. WazirX’s monthly downloads dropped from 596,000 in January to 92,000 in August.

Furthermore, with banks suspending their associations with WazirX, it has led to a further drop in the fund’s inflow at the exchange. In addition to Binance, Sam Bankman-Fried’s FTX exchange 96,000 downloads in India in July and 52,000 in August. This was up from 40,000 downloads in January.

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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
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Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
Bhushan is a seasoned crypto writer with over eight years of experience spanning more than 10,000 contributions across multiple platforms like CoinGape, CoinSpeaker, Bitcoinist, Crypto News Flash, and others. Being a Fintech enthusiast, he loves reporting across Crypto, Blockchain, DeFi, Global Macros with a keen understanding in financial markets. 

He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills. Bhushan has a bachelors degree in electronics engineering, however, his interest in finance and economics drives him to crypto and blockchain.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.