Since the Finance Act 2022 introduced Section 115BBH, gains from transferring a Virtual Digital Asset (VDA) -- the term covers cryptocurrency and NFTs -- are taxed in India at a flat 30% rate, plus applicable surcharge and 4% health and education cess, regardless of the seller's residential status or how long the asset was held.
Rules that are stricter than ordinary capital gains
Section 115BBH is notably less forgiving than India's ordinary capital gains regime in two specific ways: only the cost of acquisition can be deducted from sale proceeds (no other expenses reduce the taxable gain), and losses from VDA transfers cannot be set off against any other income, including gains from other VDAs, and cannot be carried forward to future years. A loss on one crypto position simply cannot offset a gain on another.
Separately, Section 194S imposes a 1% TDS on VDA sales once the transaction value crosses Rs 50,000 in a year. For an NRI, that 1% TDS is not a final tax -- the 30% liability under Section 115BBH still applies in full, with the TDS credited against it when the Indian return is filed, meaning the TDS is a withholding mechanism, not a settlement.
The DTAA question
Because Section 115BBH is a flat-rate domestic provision rather than a standard capital gains category, whether and how DTAA relief applies to it is a more specialized question than for conventional capital gains -- this is an area worth confirming directly with a preparer experienced in Indian VDA taxation rather than assuming the same treaty mechanics used for property or securities gains apply unchanged.