Can I Adjust VDA Losses Against Other Income or Carry Them Forward?

No, you cannot adjust the VDA losses against other income, nor can you carry forward to future years.

Is 1% TDS Under Section 194S Applicable to NRIs?

Yes, 1% TDS under section 194S applies to NRIs. It is deducted when an NRI, through Indian exchanges or Indian buyers, sells VDA if the thresholds are more than the specified limit.

Does This 1% TDS Replace the 30% Tax?

No, the 1% TDS is only a tax deducted at source. Considering this, you still need to pay 30% tax on your net capital gains and claim the TDS as tax credit in your ITR.

Which ITR Form Should an NRI With Crypto Income Use?

Generally, NRIs use ITR-2 for investment-type VDA capital gains and ITR-3 if they have professional/ business income or treat trading as a business.

Where is VDA Income Reported in the ITR?

In the ITR, VDA income is reported in Schedule VDA of ITR-2/ ITR-3, where you mention the date of acquisition, transfer date, cost, sale value, and resulting income.

Investment & Financial Planning

Virtual Digital Assets and Their Taxation for NRIs

By Pankaj Shaw |Last Updated: December 29, 2025

Virtual Digital Assets and Their Taxation for NRIs

With cryptocurrencies, non-fungible tokens (NFTs), and other digital assets, Virtual Digital Assets (VDAs) in India among investors have emerged as a significant investment avenue. With the rapid growth of the digital asset market, NRIs also started investing in these assets.

Further, recognizing this need, the government of India, through the Finance Act, 2022, for VDA, introduced a taxation system. This provision comes into effect on April 1, 2022, on both individuals and businesses working within the VDAs has created a significant impact.

Pankaj Shaw(Tax Expert)

Mr Shaw brings 8 years of experience in auditing and taxation. He has a deep understanding of disciplinary regulations and delivers comprehensive auditing services to businesses and individuals. From financial auditing to tax planning, risk assessment, and financial reporting. Mr Shaw's expertise is impeccable.

Frequently Asked Questions

A Virtual Digital Asset can be defined as any digital token, code, or information other than currency that can be sorted, traded, or transferred digitally. It includes NFTs and cryptocurrencies stated by the government.

Yes, mainstream coins like ETH, BTC, meme tokens, altcoins, stablecoins, and several NFTs are treated as VDAs for tax purposes unless they are specifically not included by notification.

Yes, NRIs have to pay tax in India on crypto or other VDA income that arises or accrues, or is received in India. For instance, payments from Indian entities or trades on Indian exchanges.

Under section 115BBH of the Income Tax Act, 1961, the capital gains from VDA are taxed at a flat 30%, plus applicable surcharge and 4% cess, irrespective of your residential status or income slab rate.

No, NRIs cannot claim tax deductions like 80C against VDA income. They can only claim the acquisition cost; no other expenses or Chapter VI-A deductions can be set off against the VDA income.

Virtual Digital Assets and Their Taxation for NRIs

Frequently Asked Questions

What is a Virtual Digital Asset (VDA) Under Indian Tax law?

Are Cryptocurrencies and NFTs Treated as VDAs for Tax Purposes?

Do NRIs Have to Pay Tax in India on Crypto or Other VDA Income?

What is the Tax Rate on VDA Income in India for NRIs?

Can NRIs Claim Deductions like 80C Against VDA Income?

Virtual Digital Assets and Their Taxation for NRIs

Frequently Asked Questions

What is a Virtual Digital Asset (VDA) Under Indian Tax law?

Are Cryptocurrencies and NFTs Treated as VDAs for Tax Purposes?

Do NRIs Have to Pay Tax in India on Crypto or Other VDA Income?

What is the Tax Rate on VDA Income in India for NRIs?

Can NRIs Claim Deductions like 80C Against VDA Income?