Changpeng Zhao, CEO of crypto platform Binance, is serious about securing his position in the Indian crypto trading market due to a change in the tax structure in India.
Binance currently has an advantage over its competitors in the Indian market as it does not include high taxes or the difficulty of moving money to and from trading platforms.
The number of Binance app downloads in India jumped to 429,000 in the month of August.
It was the highest this year and is nearly triple that of second-placed CoinDCX, according to data from trading information firm Sensor Tower.
Additionally, Binance remains the only exchange to see higher downloads in India compared to July.
This also indicates that Binance has seen strong growth in popularity in India this year. This gain in popularity can be directed towards the major tax change that India witnessed this very year.
Binance happens to offer lower fees along with other offerings and a popular peer-to-peer marketplace that allows seamless movement between tokens and cash compared to Indian exchanges.
Indian platforms will lose due to levy deduction
Indian crypto exchanges that are owned by India have started deducting the tax, but foreign exchanges such as Binance and FTX have not.
This has simply caused investors to turn to foreign platforms such as Binance and FTX, as users of the apps have mentioned, citing reasons purely related to tax law issues.
Many merchants may find a loophole in tax enforcement and a gray area where the law applies to more complex transactions.
Binance happens to be the largest crypto exchange in the world, and it’s choosing a different path compared to its rivals, who are facing increased taxes as well as problems transferring money to and from the platforms. of negotiation.
Daily trading volumes on India-based crypto platforms have dropped by 90% since the 1% crypto trading tax took place in July this year.
Binance has undoubtedly outplayed its Indian competitors with low fees and a better peer-to-peer market.
The other very important factor has to be the difference in how foreign stock exchanges handle transaction taxes imposed on domestic residents compared to Indian stock exchanges.
There remains less clarity on India’s crypto tax
Recent tax regulations in India are still unclear and ambiguous in many aspects.
Rohan Misra, Managing Director of SEBA India, said,
Recent tax regulations do not explicitly state whether the 1% withholding tax extends to crypto derivatives transactions involving futures contracts, as it does for spot crypto transactions.
According to Binance, it is “currently monitoring the situation and will make further announcements in due course,” said a spokesperson, who said this was in response to questions regarding the tax collection.