Thinking of selling some crypto to someone in India? Great! But before you hit that send button, it’s crucial to understand the tax implications.

India’s crypto regulations are still evolving, and the rules for non-residents like yourself can be a bit complex. Here’s a breakdown of the key points to consider:

Where Does the Sale Happen?

Generally, the taxman wants a cut where the income is earned. In a P2P sale, this gets tricky. If you accept the offer and transfer the crypto from outside India, then technically, the income is earned outside India.

But Here’s the Catch: Receiving the Money

Even if you earn the income abroad, things get interesting when you receive the money. If the Indian buyer deposits the funds into your NRO account (a non-resident ordinary account), India might consider it taxable income since it’s received in India.

TDS: Not Your Problem (Usually)

The good news is that the special tax deducted at source (TDS) rule for crypto transactions in India likely doesn’t apply to you as a non-resident.

Capital Gains Tax: Depends on How You Hold

The tax rate you face depends on how you held the crypto:

• Long-term investment (over 3 years): The Indian buyer deducts a 20% capital gains tax (with surcharge and cess).
• Short-term investment (under 3 years): The buyer deducts a steeper 30% capital gains tax (with surcharge and cess).

Important Note: Limited Deductions

Unlike other investments, crypto gains only let you deduct the purchase cost, not network fees or other expenses.

Double Taxation Avoidance Agreements (DTAAs) Can Be Your Friend

If you’re a resident of a country with a DTAA with India (like the UAE), you might benefit from its provisions. For example, under the India-UAE DTAA, capital gains from crypto sales by UAE residents aren’t taxable in India.

The Final Word: Seek Professional Advice

This blog provides a general overview, but tax laws can get complicated. Consulting a tax professional familiar with Indian crypto regulations is highly recommended to ensure you’re on the right side of the taxman.