Crypto taxes for nri (usa visa holder)

Crypto taxes for nri (usa visa holder)

Hi there,
I am Manohar, a NRI (USA Work visa holder) and I would like to know my income tax obligation in the below scenario
I am a cryptocurrency a.k.a virtual digital asset (Bitcoin, Ethereum and etc.,) trader in USA.
1) Buy the crypto currency (Bitcoin, Ethereum) in USA.
2) Send the digital currency to my Bitcoin wallet in India.
3) I sell the digital currency (Bitcoin) from my Bitcoin wallet in an Indian Bitcoin exchange like Coindcx or Wazirx. There is a capital gain made (3-4 percent ) after the sale of the Bitcoin in the Indian exchange like Coindcx.
4) I withdraw the principal and capital gains from my Bitcoin sale from my Bitcoin Indian wallet to my NRO account
5) Transfer funds from NRO to NRE account and repatriate the funds from my NRE account to my own USA Bank account.
6) Repeat the steps 1) to 5) over and over.

Question: 1) Should i need to pay tax on the capital gain tax (30%) In India that i made by buying the Bitcoin In USA and selling the same in an Indian exchange? Also, from the recent news there is a 1% TDS on the considered amount, since I am only selling in India (not buying digital asset in India), how TDS deduction works? if the exchange deducts TDS on my total sale proceedings, should I be able to claim it, if I am not suppose to pay the tax in India since I am already paying it in USA?

My understanding is that i would be paying the tax on the capital gain made in USA anyway and therefore need not to pay the tax on the capital gain in India (as it would be like paying tax 2 times!!!, if DTAA allows, no need of double taxation).

Therefore my understanding is that I should be able to transfer the money from my NRO to NRE account and repatriate the complete principal+interest to my USA Bank account. I pay the income tax on the capital gain (3-4 %) that I made in USA itself. Please advise. Thank you

Asked 2 years ago in Capital Gains Tax

Hi,

Since you are selling the bitcoins in India, it will be taxable in India. The DTAA of India-USA gives the taxing right to India on sale of capital assets situated in India. You can claim the refund of Indian taxes in UK. Also, note that you need to obtain Form 15CA-CB before making remittance from NRO to NRE account.

In respect of TDS by the exchange, you can claim the same while filing return of income in India. In order to obtain detailed understanding, do reach out for consultation.

Regards

Prerna Peshori

CA, Pune

199 Answers

12 Consultations

Talk to Prerna Peshori

- From AY 2023-24, income from transfer of VDA would be taxable at flat rate of 30%. Only cost of acquisition would be allowed as deduction. No setoff of loss would be allowed against the gain from VDA or with other income under any other head.

- TDS would be applicable from 01.07.2022 @1% on payments made to RESIDENT for transfer of VDA

- Income from VDA is usually treated as income from business or profession.

1. Till AY 2022-23, you can pay the tax as per the slab rates on income from VDA. From AY 2023-24, you have to pay the tax @30% on such income accrued or received in India. In case of peer to peer transaction, buyer (irrespective of residential status) is liable to deduct TDS@1% otherwise exchange or broker is liable to deduct TDS on sale of VDA through exchange or broker or conversion from one VDA to other VDA.

2. You are liable to pay tax on such income in India as it is an Indian income and claim the benefit of double taxation in USA.

3. For transfer of funds to USA, file form 15CB,CA,copy of challan of tax payment and Form A2.

For detailed discussion, you may opt for phone consultation.

Vivek Kumar Arora

CA, Delhi

4951 Answers

1105 Consultations

Talk to Vivek Kumar Arora

Answers as below

Yes Tax is payable on the net gain arising from the sale of crypto currency in India since sale is taking place in India starting from 01.04.2022

You will not have implication of TDS on the sale of Transaction its only when transfer happens from one person to another and not in case of sale to exchange

Some exchange in India have started practice to deduct TDS, still you will able to claim the amount back against tax liability in India

If you are paying any tax on said income in USA you can adjust back the amount of tax paid under DTAA and only net off tax payment required in India

Vishrut Rajesh Shah

CA, Ahmedabad

940 Answers

39 Consultations

Talk to Vishrut Rajesh Shah

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