NRI Cryptocurrency Tax India 2025: 30% Flat Rate and ITR Reporting
India taxes cryptocurrency at 30% flat regardless of holding period. NRIs on Indian crypto exchanges are subject to these rules. Here is how reporting works.
India's Virtual Digital Asset (VDA) Tax Framework
The Finance Act 2022 introduced a specific tax regime for Virtual Digital Assets (VDAs) — the legal term for cryptocurrency, NFTs, and other digital tokens — under Section 115BBH of the Income Tax Act. The key features:
- Flat 30% tax on income from transfer of VDAs, regardless of holding period. There is no distinction between short-term and long-term gains for crypto.
- No deductions permitted except the cost of acquisition. No expense claims, no depreciation, no other offsets.
- No loss set-off: Losses from VDA cannot be set off against any other income (salary, interest, capital gains). VDA losses can only be set off against VDA income within the same year — and even then, losses from one VDA cannot offset gains from another VDA under current rules.
- No loss carry forward: VDA losses lapse at the end of the financial year.
1% TDS on Every Crypto Transaction
Section 194S mandates that the buyer of VDA deduct 1% TDS on the transaction amount for transactions above ₹50,000 (₹10,000 for specified persons). In practice, Indian crypto exchanges (WazirX, CoinDCX, Zebpay) handle this by deducting 1% TDS on every sell transaction and depositing it to the government. This TDS is creditable against your total tax liability when you file ITR.
NRI on an Indian Crypto Exchange: What Applies
If you are an NRI and you trade on an Indian crypto exchange (your account is linked to an NRO bank account), the Indian VDA tax rules apply in full:
- 30% tax on all gains from crypto traded on Indian exchanges.
- 1% TDS deducted by the exchange on each sell transaction.
- You must file ITR-2 in India and include Schedule VDA if you have any VDA transactions via Indian exchanges.
NRI on a Foreign Crypto Exchange: The Position
If you are a genuine NRI (under 182 days in India) and trade on a foreign exchange (Coinbase, Binance, Kraken) with funds sourced and settled entirely outside India, the Indian tax position is straightforward: this income does not accrue or arise in India, so it is not taxable in India for NRIs.
You will however need to declare this in your country of residence (Germany, Netherlands, UK, etc.) as foreign income from VDA. Each European country has its own crypto tax rules — Germany taxes crypto held under 1 year at income tax rates, Netherlands includes crypto value in Box 3, UK charges CGT.
DTAA and Crypto: No Treaty Relief
India's DTAAs do not currently contain specific provisions for VDA income. The general position is that VDA income is "other income" and falls under residual clauses of treaties — but since India taxes VDA at source via TDS (1% on exchanges) and imposes a flat 30% rate, DTAA relief is limited in practice. Your country of residence should grant you credit for the Indian 30% tax paid when computing your local tax on the same income.
Filing ITR for VDA Income
If you have VDA income from Indian exchanges, file ITR-2 and complete Schedule VDA:
- Report each trade: date of acquisition, cost of acquisition, date of transfer, sale consideration, profit/loss.
- Exchange platforms provide year-end P&L statements; use these to complete the schedule.
- TDS of 1% deducted by the exchange shows in your Form 26AS and can be claimed as credit.
- Pay the balance 29% tax (30% minus 1% TDS) via advance tax or self-assessment tax before filing.
Use the NRI Tools Tax calculator to estimate your total Indian tax liability including VDA gains — open the tax tool.