35-59% Jump in Crypto Exchange – Impact of Union Budget 2022 on Cryptocurrencies

Despite the Union Budget that imposed a tax on crypto exchanges including CoinSwitch, Kuber, WazirX, and Unocoin, there has been a reported jump in sign-ups. New users or investors are joining platforms that increased by 35-59% across exchanges. It happened when the cryptocurrency industry and stakeholders wrote a petition to the government urging stringent tax slabs and giving clarity on details.

WazirX saw a 59% growth in sign-ups, CoinSwitch Kuber reported a 35 percent jump, and Unocoin saw 50 per growth that is posted on announcements of Union Budget 2022. As per the report, 1 percent TDS and 30 percent income tax are to be deducted on crypto income and transactions.

“New customers added on Unocoin increased by 50 per day. Daily, they are welcoming 2,000 to 3,000 users. We also have seen some uptick that is nearly about 15-20 percent. We notice new taxation rules that are going to be applicable from April 1, that effect for the long term,” Sathvik Vishwanath, CEO and Co-founder of Unocoin.

Kuber and CoinSwitch call it a result of efforts by the company for customer education. A spokesperson said, “We saw a 35 percent increment in sign-up of the Budget announcement. But this cannot entirely be attributed to the Budget with our education campaigns. The behavior of users on the platform is similar as seen on other business days, and data does not reflect any specific investor/trend yet.”

Taxes Uncertainty 

Stakeholders in industries are evaluating the impact of introducing high taxes in the same sector. They provided validation to the industry that has not been mentioned in the legal framework, taxes decided unanimously called unfair.

Along with cryptocurrency investors, Unocoin wrote a petition to the government to request the reduction of imposed tax on crypto assets. Only 3% of the population pays taxes that fall under the 30% slab and the taxes with crypto assets are imposed along with TDS that is higher than asset classes. It took nearly eight years to come up with regulations around income tax but the industry still believes in quantum and unfair numbers. 

It has been believed that the potential crypto investors who are sitting on the sidelines are ready to participate and access crypto. Therefore, space pioneers want to generate a conducive ecosystem for cryptocurrencies that are collectively deliberating implications of the tax proposed at the level of grassroots.