Non-Resident Indians and Crypto Taxes: No Exemptions, Only Flat 30% Rate

There’s a myth floating around that Non-Resident Indians (NRIs) get special tax breaks on cryptocurrency. They don’t. Not anymore. Not ever. Since April 2022, when India first started taxing digital assets, and even after the updates in April 2025, NRIs face the same harsh crypto tax rules as Indian residents - with no exemptions, no loopholes, and no hidden benefits.

Flat 30% tax on every crypto sale - no exceptions

Whether you’re living in London, New York, or Dubai, if you sell Bitcoin, Ethereum, or any other virtual digital asset (VDA) and make a profit, India taxes that gain at 30%. That’s it. No long-term vs short-term distinction. No lower rates for holding over a year. No indexation to adjust for inflation. Just 30% of your profit, no matter what.

And here’s the catch: you can’t deduct anything else. Not the transaction fees you paid on WazirX or CoinSwitch. Not the cost of your hardware wallet. Not even the internet bill you used to check prices. Only the original purchase price counts. So if you bought 1 BTC for ₹30 lakh and sold it for ₹40 lakh, your taxable gain is ₹10 lakh. You pay ₹3 lakh in tax. Period.

TDS at 1% - taken automatically, no escape

Every time you sell crypto worth more than ₹50,000 in a single financial year on an Indian exchange, 1% is automatically deducted as Tax Deducted at Source (TDS). That’s not optional. That’s not negotiable. That’s not a suggestion. It’s law. And it applies to NRIs too.

Even if you’re not an Indian resident, if you use an Indian platform like ZebPay or CoinDCX, they will withhold that 1%. You don’t get to opt out. You don’t get to file for a refund later. The money is gone before you even see it. And if you’re doing smaller trades - say, multiple sales under ₹50,000 - the rule still applies if your total annual sales cross that threshold.

Gifts, airdrops, mining? Still taxed - but differently

What if you didn’t buy crypto? What if you got it as a gift from a relative, earned it through mining, or got a free token from an airdrop? That’s not tax-free. It’s taxed differently - and sometimes worse.

Unlike sales, which are taxed at a flat 30%, gifts and airdrops are added to your total income and taxed at your personal income tax slab rate. So if you’re in the 30% bracket anyway, it’s the same. But if you’re in the 10% or 20% bracket, you might pay less. That sounds good - until you realize that most NRIs earning abroad are in the higher brackets. Plus, the value is determined at the time you received it, based on Indian exchange rates, which can be volatile and hard to track.

No reinvestment exemptions - unlike stocks or bonds

NRIs have long enjoyed tax breaks on traditional investments. Under Section 115F, if you sell shares or bonds abroad and reinvest the proceeds in certain Indian instruments - like government bonds or mutual funds - you can avoid paying capital gains tax.

Crypto? Not eligible. Not even close. The government made it crystal clear: virtual digital assets are not on the list. You can’t dodge the 30% tax by buying more Bitcoin with your profits. You can’t roll over gains into a new wallet. You can’t use a crypto exchange as a tax shelter. The law doesn’t recognize crypto as a qualifying asset for any reinvestment exemption. That’s a major difference from traditional finance.

Residency rules are changing - and it could trap you

Starting April 1, 2026, the rules for who counts as an NRI are changing. Right now, you’re considered an NRI if you’re outside India for more than 182 days in a year. But from next year, if you’re in India for 120 days or more AND earn over ₹15 lakhs from Indian sources, you’ll be treated as a resident for tax purposes.

What does that mean for your crypto? Everything changes. If you’re now a resident, India can tax your global crypto gains - even if you bought Bitcoin on Binance, stored it in a Ledger, and never touched an Indian exchange. Your entire crypto portfolio could become taxable in India. That’s a huge shift. Many NRIs who thought they were safe because they lived abroad may suddenly find themselves on the hook for taxes on gains they never reported.

No loss offsetting - you can’t reduce your tax bill

One of the biggest disadvantages for crypto investors - residents or NRIs - is that you can’t use losses to reduce your tax bill. If you lost ₹5 lakh on Solana but made ₹8 lakh on Ethereum, you still pay tax on the full ₹8 lakh. The loss doesn’t cancel it out. You can’t carry it forward to next year. You can’t use it against salary income. You can’t even use it against other crypto gains.

This is unlike stocks, where you can offset losses. It’s unlike real estate, where you can deduct interest and repairs. Crypto losses are just gone. You pay tax on your wins, and your losses? They vanish into thin air. That’s a brutal structure.

Compliance is mandatory - and risky

You must declare your crypto holdings in your income tax return. Every wallet address. Every transaction. Every gain. If you don’t, you risk penalties, interest, or even prosecution. The Income Tax Department now has tools to track blockchain activity. They can cross-reference data from Indian exchanges, foreign platforms with Indian ties, and even public blockchain ledgers.

NRIs who file returns in India - whether they’re RNORs (Resident but Not Ordinarily Resident) or still classified as non-residents - must disclose crypto. If you’re filing in the US or UK, you might still need to report Indian-sourced crypto gains. Double reporting is possible. Double taxation is a real risk.

What about foreign exchanges?

Some NRIs think using Binance, Kraken, or Coinbase will help them avoid Indian taxes. It won’t. If you’re an NRI with Indian income sources - like rental income, dividends from Indian stocks, or even a pension - the Indian tax department can still claim jurisdiction over your crypto gains if they’re linked to Indian residency.

And if you’re using an Indian bank to fund your foreign exchange account? That transaction trail is visible. The government has access to data from banks, payment gateways, and even foreign financial institutions under FATCA and CRS agreements. Hiding crypto behind a foreign platform won’t protect you.

Bottom line: No perks, just pressure

There are no crypto tax exemptions for NRIs in India. No special deals. No hidden benefits. No reinvestment loopholes. No loss carryforwards. No lower rates. Just a flat 30% tax, 1% TDS, strict reporting, and looming residency changes that could pull your global crypto holdings into India’s tax net.

If you’re an NRI holding crypto, your best move isn’t looking for loopholes - it’s keeping perfect records. Track every purchase, sale, gift, and transfer. Know your residency status. Understand when you might cross the 120-day threshold. And talk to a tax advisor who understands both Indian crypto law and international tax treaties.

There’s no shortcut. There’s no exemption. And waiting until next April to figure it out could cost you more than the tax itself.