Indian Terra Investors Brace for Another Blow After LUNA 2.0 Airdrop Under New Tax Laws

cryptonews.com:

Terra network coin holders in India are facing a “double whammy” following the LUNAC and UST crash last month – and could be hit with 30% tax bills from the recent LUNA 2.0 airdrop.

The genesis airdrop was made on May 30, with LUNAC holders distributed tokens now known as LUNA. However, investors in India aren’t as fortunate, due to new tax laws that came into force in April.

Although the text of the law does not specifically address airdrops, and contains “vague” passages – Jay Sayta, a technology and gaming lawyer, was quoted as saying by Bloomberg – this would likely not stop the taxman. In fact, this very ambiguity could work in the tax body’s favor, he opined.

Sayta was quoted as stating:

“The wordings in the law are so vague, including the definition of virtual digital asset and the definition of transfer, that it would be open to litigation of challenge by the tax department. They normally consider the most aggressive view possible with a view to collecting higher taxes, notwithstanding the fact that such a view may result in absurdity.”

The law states that the “transfer” of what lawmakers termed “virtual digital assets” should be taxed at a flat rate of 30%. Tax officers are, the lawyer added, likely to see any coin distribution as income – and thus subject to taxation.

Rajagopal Menon, the Vice President of the WazirX crypto exchange, which is owned by Binance, stated that over 160,000 investors held LUNAC on the exchange on May 9, and “by May 15 the number grew by 77% in India.”

An Indian crypto tax advisor was also quoted as stating that the airdrop “may fit into the existing definition of gifts” – meaning that the flat 30% tax “may not apply.” However, as gifts are also subject to income-graded tax, many would still