Just recently, a bomb was dropped on the cryptocurrency industry based in India by the Indian Government. The crypto investors were in shock to see that the Indian Government had announced a 1% tax on cryptocurrency transactions.
Tax Imposition on Crypto Transactions
The Indian Government recently imposed a 1% tax on any transactions for cryptocurrencies. The tax has been implemented on cryptocurrency exchanges that are based in India.
Following the implementation of the 1% tax rule, local crypto investors have started to flee the cryptocurrency exchanges operating locally.
However, the major cryptocurrency exchanges seem to be taking full advantage of the recent change implemented by the Indian Government.
Binance is Benefiting Tremendously
Binance among major cryptocurrencies seems to be taking full advantage of the 1% tax rule. The records show that since the announcement, Indian users have downloaded the Binance exchange more than expected.
The report suggests that 429,000 more downloads than expected have been recorded in India alone for the Binance exchange in August.
This is the highest figure Binance has recorded in any month of the running year.
Indian’s Downloaded Binance Three Times More than Expected
According to the statistics, the application for Binance downloaded by the Indians was three times more than the likes of any other cryptocurrency exchange.
The exchange even surpassed CoinDCX, which is a major local cryptocurrency exchange with the highest download rate in India.
The surge started in August
It was the month of July when the Indian Government announced the 1% tax deducted at source (TDS) implementation. The TDS was additional to the already implemented 30% income tax for any profit generated from cryptocurrency transactions in India.
Following the implementation, the trading volume on all major/minor cryptocurrency exchanges in India has dropped at an extremely high rate. The average drop rate in the trading volume recorded for the Indian exchanges is 90%.
Major Exchanges Thrive
With the local exchanges implementing the 1% TDS, the crypto investors are looking for alternative exchanges that are not imposing the 1% charge.
This is where major cryptocurrency exchanges such as FTX and Binance are. These exchanges have not applied and are not obligated to implement 1% TDS because they operate from outside of India.
Therefore, the investors are running away from the local crypto exchanges and are now clinging to these exchanges for their benefit.
Although Binance is outside of the Indian regulatory jurisdiction, still, it is providing services in India. Therefore, it must comply with the regulatory guidelines and ensure the Indian regulators do not go after the exchange.
The matter is currently under observation by the Binance legal teams and officials. They may look into the matter of implementing the 1% charge so they do not find themselves breaching any regulatory protocols.