If you're a non-resident Indian selling crypto, India taxes the gain — but the rules depend on where you bought it and whether the exchange reported it. Resident rules don't automatically apply to you, and the old "NRIs are exempt" belief is wrong. Here's how it actually works.
Residency decides everything
Your tax status, not your passport, sets the rules. Under the Income Tax Act, you're a resident if you stay in India 182 days or more in a financial year, or 60 days plus 365 days over the prior four years (with a higher 182-day threshold for certain Indian citizens working abroad). Miss those thresholds and you're an NRI. That single distinction changes your rate, your reporting, and whether TDS gets deducted at source.
Resident vs NRI on crypto gains
For residents, crypto gains are taxed at a flat 30% under Section 115BBH, with no deduction for expenses except the cost of acquisition. For NRIs, the same section applies to income sourced in India. The wrinkle is sourcing: crypto held on an Indian exchange or sold to an Indian buyer is generally Indian-source income. Crypto bought and sold entirely on a foreign exchange, with no Indian nexus, usually isn't.
What "Indian-source" really means
If you're an NRI trading on CoinDCX, the transaction touches an Indian platform and Indian payment rails. That's a strong signal the gain is taxable in India. If you bought on a foreign exchange years ago and sold while abroad, the picture is murkier and worth a CA's review. Don't assume either way.
The 30% flat rate and the 1% TDS
Two numbers dominate NRI crypto taxation. The first is the 30% flat tax on gains under Section 115BBH, effective from April 2022. The second is the 1% TDS under Section 194S, deducted on the transfer of virtual digital assets above a threshold. Both apply regardless of your income slab.
How TDS hits an NRI seller
When you sell crypto on an Indian exchange, the platform typically deducts 1% TDS before crediting proceeds. That's not optional and not refundable at the point of sale — it's a credit you claim when filing. For NRIs, this can create a cash-flow squeeze: you've paid tax upfront on a trade that might not even be taxable if you can prove foreign sourcing. Keep every transaction record.
Losses you can't offset
Here's the sting. Crypto losses can't be set off against gains from other crypto, other capital assets, or business income. You also can't carry them forward. A ₹5 lakh loss on one coin doesn't reduce your ₹8 lakh gain on another. That asymmetry catches NRIs who treat crypto like equity.
A concrete scenario
Say you're an NRI in Dubai. You bought Bitcoin on a foreign exchange in 2021 for $30,000 and sold it in 2024 for $70,000. You never used an Indian platform. The $40,000 gain sits outside India's tax net in most readings — but if any leg touched an Indian exchange or buyer, the analysis flips. Now imagine you'd sold that same Bitcoin on CoinDCX instead. You'd owe 30% on the gain, plus 1% TDS deducted at sale. Same asset, same profit, wildly different outcome. That's the whole game.
Reporting and compliance for NRIs
You may need to file an Indian return if you have Indian-source income above the basic exemption limit or want to claim a TDS refund. Schedule VDA in the ITR captures crypto income. If you're a resident of a country with a DTAA with India, treaty provisions may reduce double taxation — but crypto isn't always covered by older treaties, so check the specific agreement.
Records to keep
- Exchange statements showing buy and sell dates, amounts, and counterparties
- TDS certificates (Form 16A) from Indian platforms
- Proof of residency status for the relevant financial year
- Foreign exchange records if you're claiming non-Indian sourcing
Don't rely on an exchange's dashboard as your only record. Platforms change, and you'll want independent proof.
Frequently asked questions
Do NRIs pay tax on crypto gains in India?
Yes, if the gain is Indian-source — typically when you trade on an Indian exchange or sell to an Indian resident. The 30% flat rate under Section 115BBH applies. If your crypto activity has no Indian nexus at all, it generally falls outside Indian tax. Get professional advice for edge cases.
Is the 1% TDS deducted for NRI sellers?
Generally yes, when you transfer a virtual digital asset on an Indian platform above the threshold. The exchange deducts it at source. You claim it as a credit when filing your return, and it may result in a refund if your final liability is lower.
Can NRIs offset crypto losses?
No. Losses from virtual digital assets can't be set off against gains from other VDAs or other income, and they can't be carried forward. This applies to residents and NRIs alike under current rules.
Does a DTAA help with crypto tax?
Sometimes. If India has a tax treaty with your country of residence, it may prevent double taxation — but many older treaties don't mention crypto explicitly. Review the specific treaty and consult a CA before assuming relief applies.
Before your next trade, pull your residency days for the financial year and check whether the exchange you're using reports to Indian authorities. That one-hour exercise will tell you more than any generic guide.