The collapse of USTC, the algorithmic stablecoin of Terra, put an enormous impact on the crypto market across the globe. The investors underwent the loss of many billions in dollars during the latest crash. Nonetheless, to minimize the holders’ loss, Do Kwon introduced the fresh tokens’ airdrop. In the meantime, the investors in India might be experiencing a thirty percent of tax over the Terra holdings thereof.
Will Tax Be Implemented on LUNA Airdrop?
Following the experience of a huge loss over the TerraClasicUSD and Terra Classic (LUNC), the crypto community in India has to bear the latest tax regime. As per Bloomberg, the number of the Terra LUNA 2.0 tokens that are obtained in the airdrop can have the implementation of the 30% tax on the behalf of the country’s authorities. Nonetheless, no permission would be granted to the holders to cancel the profits gained in the unique token as compensation for the loss of the previous token.
The Finance Minister of India, in the country’s recent budget, announced that a tax of up to twenty percent will be implemented on the profits in cryptocurrency from 1st April onwards. This additionally took account of the Tax deduction at source (TDS) in the case of every transfer. Nevertheless, it is yet ambiguous whether the airdrops are also included in it. CoinDCX’s CoS, Manhar Garegrat, indicates that this type of distribution can be classified as income. Thus, tax can be implemented on it.
The Calculation of the Tax
According to the report, the tech lawyer – Jay Sayta – brought to the front that the words utilized in the law count to be somehow ambiguous. He added that the virtual digital assets as well as the transfer’s definitions need to be clarified to a great extent. In his words, the intention of the tax department is to gather taxes from the respondents in every possible way.
Vice president at WazirX, Rajagopal Menon, shared the data dealing with the holders of LUNA in the Indian region. The respective data pointed out that more than 160,000 India-based consumers were possessing the very token on 9th May. Nonetheless, after that the position of the stablecoin did not remain the same and, as a consequence, a plunge of nearly 77% was witnessed in the value of the token. In the meantime, the number of people holding TerraUSD tokens is ambiguous at this time even. The volumes of LUNA reached their highest points on 11th and 12th May.
As the report moved on, the experts expressed their point of view, mentioning that the latest tax regime can keep approximately two levels of taxation. As they put it, a straight tax of thirty percent will be imposed on the sum of the tokens that the consumers have obtained from the airdrop of Terra LUNA 2.0. In the case of the 2nd phase, an outright thirty percent in tax will be compulsory to be paid on those tokens that will be sold by the holders at some higher value.
