Asher Draycott Nov
14

Non-Resident Indians and Crypto Taxes: No Exemptions, Just Rules

NRI Crypto Tax Calculator

Calculate your tax liability under India's 30% crypto tax rule for NRIs. No exemptions, no loss offsets.

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Note: As per Indian tax rules for NRIs:

30% tax on all crypto gains (no long-term holding benefits)
1% TDS applies on transactions over ₹50,000
No loss offsets or expense deductions allowed

Most Non-Resident Indians (NRIs) assume their crypto investments get special treatment-like the tax breaks they enjoy on bonds, mutual funds, or property sales. But here’s the truth: crypto doesn’t get any of that. As of 2025, India treats cryptocurrency gains the same for NRIs as it does for residents. No exemptions. No loopholes. Just a flat 30% tax, plus a 1% TDS, and no way to offset losses.

There’s no NRI crypto tax exemption-here’s why

You might remember Section 115F. That’s the rule that lets NRIs avoid capital gains tax when they reinvest money from selling foreign assets-like shares or property-into approved Indian instruments. Bonds. Debentures. Certain mutual funds. But crypto? Not on the list. The government made it clear in 2022, and doubled down in 2025: Virtual Digital Assets (VDAs) are excluded from every single tax benefit NRIs used to rely on.

That means if you sold Bitcoin in 2024 and used the money to buy an Indian government bond, you’d qualify for a tax break. But if you sold Bitcoin and bought Ethereum? No exemption. You pay 30% on the profit. Period.

The 30% tax rule hits everyone the same

Unlike stocks or real estate, where you pay less if you hold an asset for more than a year, crypto gains are taxed at 30% no matter how long you’ve held it. And you can’t deduct anything beyond the original purchase price. No transaction fees. No wallet costs. No gas fees on Ethereum. Nothing.

Let’s say you bought 0.5 BTC for ₹15 lakh in 2022. In 2025, you sell it for ₹30 lakh. Your profit? ₹15 lakh. Tax due? ₹4.5 lakh. That’s it. No deductions. No carry-forwards. Even if you lost money on other crypto trades that year, you can’t use those losses to reduce this tax bill. The rules don’t allow it.

TDS is automatic-and it’s not optional

If you trade crypto on an Indian exchange like WazirX, CoinDCX, or ZebPay, and your transaction hits ₹50,000 in a financial year (or ₹10,000 for certain cases), the exchange automatically deducts 1% as TDS. That’s Tax Deducted at Source. It’s not a prepayment you can reclaim later-it’s a direct tax grab.

Even if you’re an NRI living in London or Singapore, if you use an Indian platform, the TDS applies. And you still have to report the full transaction in your Indian tax return. The exchange reports it to the tax department. You can’t hide it. And if you don’t declare it? Penalties can go up to 200% of the tax evaded.

An ancient tree with fruit labeled investments, but crypto branch broken on the ground.

Airdrops, gifts, mining? Still taxable

What if you didn’t buy crypto-you got it for free? Maybe you got an airdrop from a new project. Or someone gifted you 10 ETH. Or you mined Bitcoin from home? Here’s where it gets messy.

These aren’t taxed at the flat 30%. Instead, they’re treated as income and added to your total earnings for the year. If you’re an NRI with no other Indian income, you might pay 0% tax on this. But if you earn ₹20 lakh a year from a job in Dubai and get ₹5 lakh worth of crypto as a gift? That gift gets added to your ₹20 lakh. Now you’re in the 30% tax bracket. The tax hits harder than if you’d bought it.

Residency rules are changing-big time

The biggest shift isn’t about crypto. It’s about you. Starting April 1, 2026, the Indian government is changing who counts as an NRI. Before, you had to stay in India less than 182 days a year to keep your NRI status. Now, if you’re in India for 120 days or more AND earn over ₹15 lakh from Indian sources, you’re no longer an NRI-you’re a resident.

What does that mean for your crypto? Everything changes. As a resident, your global crypto gains become taxable in India. So if you’re holding Bitcoin on Binance, and you sell it from your apartment in Toronto, but you spent 130 days in Mumbai last year? The Indian tax department can now claim a cut. You might owe tax on gains made outside India.

This isn’t hypothetical. The rules are final. Tax advisors are already warning NRIs to track their days in India like a flight log. One extra week could flip your entire tax status.

What counts as an Indian source?

This is the gray zone. If you buy crypto on a U.S.-based exchange like Coinbase, using your Indian bank account, is that an Indian source? What if you use a foreign wallet but transfer rupees to an Indian friend who buys crypto for you? The law doesn’t say. The tax department hasn’t clarified. So right now, it’s a gamble.

Most NRIs play it safe: they treat all crypto activity as potentially taxable in India. If you’re unsure, assume the Indian tax department will want to see your records. Keep every transaction. Every wallet address. Every receipt. Even if you’re using a decentralized exchange like Uniswap, screenshot your trade history. You’ll need it.

An NRI at a desk surrounded by glowing crypto records as a tax shadow looms outside.

Why crypto is worse than traditional investments for NRIs

Compare crypto to stocks. If you sell shares of Infosys and reinvest in another Indian company, you can defer or reduce tax. If you sell property and buy a house, you get exemption under Section 54. If you earn interest on NRE fixed deposits? Tax-free.

Crypto? Nothing. No deferral. No reinvestment loophole. No tax-free buckets. Just a 30% tax, no deductions, no loss offsets, and no future relief in sight. The government hasn’t signaled any plan to change this. In fact, the 2025 updates made it stricter.

What NRIs should do now

If you’re an NRI with crypto:

Track every transaction-buy, sell, gift, airdrop, swap.
Know your residency status. Count your days in India. Don’t guess.
Use Indian exchanges only if you’re okay with automatic TDS. Use foreign platforms if you want to avoid it-but still report everything.
Don’t assume gifts or airdrops are tax-free. They’re income.
Keep records for at least 8 years. The tax department can go back that far.
Consult a tax advisor who understands both NRI rules and crypto. Most chartered accountants don’t.

There’s no magic trick. No hidden benefit. Crypto isn’t a tax haven for NRIs-it’s a tax trap if you’re not careful. The rules are clear. The penalties are real. And the clock is ticking on the new residency law.

What’s next?

The government is watching how crypto adoption grows. If usage spikes, they might add reporting requirements, like the 1099 forms in the U.S. Or they might start taxing staking rewards. Or they might try to force foreign exchanges to collect Indian taxes.

But don’t wait for change. The law isn’t coming to help you. It’s coming to collect. Right now, the only advantage NRIs have is time-to plan, to document, and to act before April 2026.

Asher Draycott

I'm a blockchain analyst and markets researcher who bridges crypto and equities. I advise startups and funds on token economics, exchange listings, and portfolio strategy, and I publish deep dives on coins, exchanges, and airdrop strategies. My goal is to translate complex on-chain signals into actionable insights for traders and long-term investors.

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