Airdrops to be taxed at 30% in India
According to Bloomberg News, Indian investors who have recovered a portion of their losses through the LUNA 2.0 airdrop may have to pay taxes equal to 30% of the value due to India’s cryptocurrency tax legislation.
The country taxes cryptocurrencies at 30% and does not allow investors to offset gains on one token with losses on another.
The crypto tax regime, which took effect in April, charges a 30 percent flat-rate tax on the transfer of a virtual asset. Despite the fact that airdrops are not officially mentioned, experts expect them to be included.
LUNA 2.0 is the latest version of LUNA
The taxation of airdrops is quite severe.
Whether or not people choose to, the country’s tax laws require them to pay taxes on any money they make from crypto assets. Many Indian investors will face huge tax obligations as a result.
According to Jay Sayta, a technology and gaming lawyer, the terminology of this regulation is complex when it comes to airdrops, but there are “vague” aspects that might put taxmen straight into your neck. In truth, these incidents may help tax officials.
They usually consider the most aggressive technique possible to collect larger taxes, according to Jay Sayta, despite the fact that this mindset may lead to ridiculousness.
The Luna 2.0 airdrops may fit within the existing definition of gifts, according to Anoush Bhasin, founder of crypto-asset tax specialist Quagmire Consulting. As a result, a flat 30% tax may not be imposed; rather, gifts may be taxed according to the taxpayer’s income range or slab rate.
According to Rajagopal Menon, Vice President of the Binance-based WazirX crypto exchange, over 160,000 investors held Luna on the market as of May 9. By May 15, the number had risen by 77 percent in India. However, how many more investors have TerraUSD in their portfolios is unknown.
When it comes to airdrops, there are two rounds of taxes. The first is when the tokens are given to you. You will be required to pay a gift tax or a flat 30% tax based on the tokens’ value at the moment they are delivered to you. The tokens are then sold in the second step. You’ll have to pay a flat 30% tax on any profit you make from the sale of tokens, regardless of how they’re classified.