NRIs Face Complex Rules When Buying Cryptocurrency in India

Non-resident Indians (NRIs) may face difficulties buying and selling cryptocurrencies in India due to specific rules imposed by Indian crypto exchanges.

The main difference between NRIs and resident Indian traders is not whether the latter can own digital assets, but how they can buy and sell them through Indian exchanges. The trading requirements for NRIs are more complex than those for resident customers.

NRIs cannot use their NRE or NRO accounts for crypto transactions, as some exchanges may not accept these types of accounts. Instead, they will need to provide a verified bank account in their own name.

The Indian government also imposes a 30% tax on crypto gains and a 1% TDS on transfers, which NRIs must comply with. According to the Income Tax Department's Section 115BBH for non-resident taxpayers, 'Gains from Virtual Digital Assets are subject to a 30% tax (along with applicable surcharge and 4% cess) under Section 115BBH.'

NRIs can open accounts with Indian crypto exchanges, but they will need to undergo the exchange's own KYC and eligibility requirements. They may also need to provide documents such as a PAN card, passport, and proof of overseas residence.