Crypto Tax for NRI: VDA Tax India, TDS & Reporting

The tax rate applies to taxable income from a transfer, not automatically to the entire sale consideration. The withholding base is different. These figures describe FY 2025-26 under the Income-tax Act, 1961; they do not establish that an offshore transaction by a non-resident is taxable in India.

Do not apply Section 194S automatically to a non-resident seller: the payer must confirm whether Section 195 or another applicable withholding provision governs the payment.

Record your Indian residential status, the trading dates, counterparties, exchange and wallet locations, settlement currency and bank trail. NRI status alone does not exempt Indian-source income, but an Indian bank payment alone is not a complete statutory source analysis either. Exchange access, asset situs and treaty characterisation are confirmed for your facts. Keep a transaction ledger rather than relying on a platform summary that assumes every customer is resident. Link each disposal to its acquisition record, including transfers between your own wallets, so a wallet movement is not casually treated as a sale.

Section 115BBH permits acquisition cost only when calculating taxable VDA transfer income. Do not deduct other expenses or allowances simply because they would be business deductions for a different asset. A loss on one VDA cannot reduce a gain on another VDA or income from salary, rent or other sources, and cannot be carried forward. Consequently an annual net trading result can conceal taxable profitable transfers. Identify the income and cost for each taxable disposal; do not treat a negative portfolio valuation as a deductible tax loss. Unusual token events, rewards and acquisition-cost evidence are confirmed for your facts.

Section 194S has a 1% headline rate on transfer consideration above the applicable threshold, rather than on profit. However, its statutory resident-payee scope means that an NRI cannot assume this is the correct withholding provision merely because an Indian exchange deducted 1%. Confirm the applicable payment provision, including Section 195 where relevant, the payer obligations and any correction needed for an incorrectly resident KYC profile. We do not state an unverified threshold amount. Reconcile exchange statements, withholding certificates and the tax-credit records with the return; TDS is a credit mechanism, not a substitute for assessing the final tax.

Report taxable VDA transfers in Schedule VDA of the applicable ITR with the required acquisition and transfer information. Schedule VDA should not be described as a universal holdings disclosure; any separate asset-reporting obligation depends on residence and the applicable return. A VDA gift can be taxable in the recipient’s hands, subject to the applicable gift exemptions and conditions. Do not describe every family gift as taxable or every token receipt as exempt. Document the donor, relationship, date and valuation basis; the precise treatment is confirmed for your facts. Retain wallet histories and exchange exports even after an account closes.

Do not budget for a DTAA to automatically reduce the 30% Section 115BBH rate on an India-taxable VDA transfer. Whether a treaty changes Indian taxing rights depends on residence, characterisation and the transaction, and is confirmed for your facts. Obtain the right residence evidence using our Tax Residency Certificate and DTAA guide. Before changing countries, reconcile exchange KYC, available account access and your Indian day count. The RNOR planning guide explains the India-side residence framework; RNOR is not a blanket exemption for Indian-source VDA income.

Prepare one pack containing the residence analysis, transaction ledger, cost evidence, gift records and withholding reconciliation. Separate trades from transfers between wallets; mark missing data for review rather than filling it with guessed values. Then check the applicable ITR, source analysis and any overseas reporting with the relevant advisers. Our NRI investing hub connects the wider account and repatriation decisions. The Cross-Border Asset Review is tax and FEMA decision support, not a recommendation to buy, sell or allocate crypto assets.