Moving Crypto Assets Abroad from India: Legal Rules You Must Know in 2025
18 February 2025
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Trying to move your crypto assets out of India isn’t just a technical task-it’s a legal minefield. If you think sending Bitcoin or Ethereum to a wallet in the U.S., Singapore, or Dubai is as simple as copying a wallet address, you’re in for a surprise. As of 2025, India has one of the strictest crypto regulatory frameworks in the world, especially when it comes to cross-border transfers. The government doesn’t ban crypto, but it makes moving it overseas expensive, slow, and risky if you don’t follow the rules.
What’s Legally Allowed-and What’s Not
Cryptocurrencies are legal to hold and trade in India, but they’re not recognized as money. The government calls them Virtual Digital Assets (VDAs), and they’re treated like property under tax law. That means you can own them, send them, and even sell them. But when you send them abroad, you’re not just moving digital files-you’re triggering multiple layers of regulation. The Reserve Bank of India (RBI) and the Finance Ministry treat crypto transfers as current account transactions under the Foreign Exchange Management Act (FEMA). That’s the same category used for sending money overseas for travel, education, or gifts. But unlike sending dollars, crypto transfers come with extra rules. You can’t just use any exchange. Only platforms registered with the Financial Intelligence Unit-India (FIU-IND) are allowed to process cross-border crypto transactions. That includes WazirX, CoinDCX, and ZebPay-but not many offshore exchanges like Binance or KuCoin unless they comply with Indian KYC rules. In June 2025, the Enforcement Directorate sent notices to 25 foreign exchanges demanding they collect full Indian user data, including PAN, Aadhaar, and physical addresses. If they don’t comply, they risk being blocked in India. So if you’re trying to send crypto directly from an Indian wallet to an unregistered offshore exchange, you’re already on shaky ground.Taxes: It’s Not Just 30%
The biggest surprise for most people? The tax bill on moving crypto abroad isn’t just one tax-it’s three stacked on top of each other. First, there’s the 30% capital gains tax on any profit you made from buying and selling crypto. And no, you can’t offset losses. If you bought Bitcoin at ₹20 lakh and sold it at ₹30 lakh, you owe ₹3 lakh in taxes on the ₹10 lakh gain-even if you’re moving the rest overseas. Then there’s the 1% Tax Deducted at Source (TDS). Every time you transfer crypto-whether you’re selling, swapping, or sending it abroad-your exchange automatically withholds 1% of the transaction value if it’s over ₹50,000 in a financial year. That’s on top of the 30%. So if you send ₹10 lakh worth of ETH to a U.S. wallet, ₹10,000 is taken right away as tax. And then there’s GST. Since July 2025, exchanges like Bybit and CoinSwitch charge an 18% Goods and Services Tax on every crypto transaction: trades, withdrawals, staking, even converting crypto to fiat. That’s right-when you withdraw crypto from an Indian exchange to a foreign wallet, you pay 18% on the value of what you’re sending. Add those up: 30% + 1% + 18% = 49%. That’s nearly half your asset value gone before you even touch your overseas wallet. And this doesn’t include the potential 60% penalty if you don’t declare the asset in your tax return.Reporting: You Must Disclose Everything
The Income Tax Department doesn’t trust you to self-report. That’s why they’ve made disclosure mandatory. Every Indian resident who holds crypto abroad must file Schedule VDA in their ITR-2 or ITR-3 form. This isn’t optional. It’s a legal requirement. You need to list every crypto asset you own outside India: the type (BTC, ETH, etc.), the quantity, the date you acquired it, the cost in INR, and the value at the time you transferred it abroad. The government uses RBI’s exchange rate on the exact day of the transfer to calculate this. If you send crypto on a Wednesday, you use Wednesday’s RBI rate-not the average, not the highest, not the lowest. Failing to disclose can trigger Section 158B of the Income Tax Act. That means a 60% penalty on the undisclosed value. And if the department thinks you’re hiding assets to evade tax, they can launch a criminal investigation. There have been at least 12 cases since January 2025 where individuals faced prosecution for undeclared foreign crypto holdings.
FEMA Limits: The 0,000 Cap
Even if you pay all your taxes and file everything correctly, you’re still not free to move unlimited crypto abroad. Under FEMA Notification No. 56/2025, Indian residents need prior approval from an authorized dealer bank (like SBI or HDFC) to transfer crypto worth more than $250,000 in a single financial year. That’s not a limit on how much you own-it’s a limit on how much you can legally send out. If you have $1 million in crypto and want to move it all overseas, you’d need to split it across multiple years or get special permission. Most banks don’t have clear procedures for this yet, so applicants often wait weeks-or get denied. And here’s the catch: the government treats crypto as intangible movable property. That means it’s not like sending cash or shares. There’s no standard form. Banks may ask for proof of source of funds, tax clearance certificates, or even a letter from your crypto exchange confirming compliance. Many users report being asked for screenshots of their entire transaction history going back two years.The Travel Rule: Every Transfer Is Tracked
India is the only country in the world that applies the FATF Travel Rule to every crypto transaction, no matter how small. In most countries, you only need to share sender and receiver info if the transfer is over $1,000. In India, even a ₹500 transfer triggers this rule. Your exchange must collect and send to the recipient’s exchange:- Your full legal name
- Your PAN number
- Your physical address or date of birth
- Your Aadhaar number
- Your wallet address
What Happens When You Try?
Real users are running into roadblocks. On Reddit, one user said WazirX froze their account after they tried sending 2 BTC to Coinbase Pro. They were given 72 hours to submit FEMA documents or lose access. Another survey found that 68% of Indian crypto users have had transactions blocked when moving crypto abroad. The top reasons? Banks refusing to issue compliance certificates (57%) and confusion over how to value crypto on the day of transfer (49%). Some try to bypass this using peer-to-peer (P2P) platforms like LocalBitcoins or Paxful. But even those aren’t safe. The FIU-IND now monitors P2P transaction patterns. If you’re buying crypto from someone in the U.S. using UPI and then immediately sending it to a foreign wallet, your activity flags as suspicious.
What’s Next?
India is preparing for a global audit by the Financial Stability Board in October 2025. To pass, they’re rolling out the Crypto-Asset Reporting Framework (CARF), which will automatically share your crypto transaction data with tax authorities in over 100 countries-including the U.S., UK, Singapore, and UAE. That means even if you hide your crypto abroad, India will know about it. The Finance Ministry says comprehensive crypto legislation might come in the Winter Session of Parliament 2025. But don’t expect relief. Finance Minister Nirmala Sitharaman has been clear: cryptocurrencies “cannot be a legal currency in India.” That means the goal isn’t to make crypto easy to move-it’s to control it, tax it, and track it.What Should You Do?
If you’re planning to move crypto out of India, here’s your checklist:- Calculate your capital gains and pay the 30% tax.
- Confirm the 1% TDS was deducted on your transfer.
- Check if your exchange charged 18% GST on the withdrawal.
- Value your crypto in INR using the RBI exchange rate on the transfer date.
- File Schedule VDA in your ITR-2 or ITR-3 before the July 31 deadline.
- If sending over $250,000, apply for FEMA approval through your bank-start early.
- Use only FIU-IND registered exchanges for outbound transfers.
- Keep full records: wallet addresses, timestamps, exchange statements, tax receipts.
Bottom Line
Moving crypto from India isn’t about technology. It’s about paperwork, timing, and compliance. The system is designed to make it hard-not impossible. If you follow every rule, you can do it. But you’ll pay more, wait longer, and document everything. There’s no shortcut. And if you skip even one step, you’re risking penalties, account freezes, or worse. The government isn’t trying to stop crypto. They’re trying to control it. Your job? Play by their rules-or pay the price.Can I send crypto from India to a foreign wallet without paying taxes?
No. Every crypto transfer out of India triggers capital gains tax (30%), 1% TDS, and 18% GST if done through an Indian exchange. Even if you’re transferring to your own wallet abroad, you must declare the value and pay taxes on any profit made. Not paying taxes is considered tax evasion and can lead to a 60% penalty plus criminal charges.
Is there a legal limit on how much crypto I can send abroad?
Yes. Under FEMA regulations, Indian residents can transfer crypto worth up to $250,000 per financial year without special approval. Anything above that requires prior permission from an authorized dealer bank (like SBI or HDFC). Exceeding this limit without approval is a violation of foreign exchange law.
Do I need to report my foreign crypto holdings to the Indian tax department?
Yes. You must declare all foreign crypto assets in Schedule VDA of your ITR-2 or ITR-3. This includes the type, quantity, acquisition cost in INR, and value at the time of transfer. Failure to disclose can result in a 60% penalty on the undisclosed amount and potential prosecution under Section 158B of the Income Tax Act.
Can I use Binance or other foreign exchanges to move crypto from India?
Technically, you can send crypto to a foreign exchange like Binance, but Indian exchanges like WazirX or CoinDCX are required to block transactions to non-compliant platforms. Since June 2025, the Enforcement Directorate has demanded that offshore exchanges collect Indian KYC data. If they don’t, Indian users may face frozen accounts or blocked transfers. Using unregistered platforms increases your legal risk.
What happens if my crypto transfer gets blocked?
If your transfer is blocked, it’s usually because the recipient exchange doesn’t comply with India’s FATF Travel Rule or you haven’t completed FEMA documentation. Contact your Indian exchange for details. You may need to provide bank certifications, tax clearance, or proof of source of funds. Delays of 7-15 days are common. Do not attempt to bypass the system using P2P platforms-this increases the risk of being flagged by FIU-IND.
Is it safer to use P2P platforms to move crypto out of India?
No. While P2P platforms like LocalBitcoins or Paxful seem like alternatives, they’re still monitored by FIU-IND. Large or frequent P2P transactions, especially when paired with immediate overseas transfers, are flagged as suspicious. The government has increased surveillance on these channels, and users have been contacted for audits. P2P doesn’t avoid taxes or reporting-it just makes tracking harder for you, not safer.
Lena Novikova
October 29, 2025 AT 04:08Okay so let me get this straight-you pay 30% capital gains, then 1% TDS, then 18% GST just to move crypto out of India? That’s not regulation, that’s extortion. And they call it ‘property’? Bro, if I sell my car and move it to another country, I don’t pay GST on the damn wheels. This is a crypto tax trap disguised as policy. They’re not trying to control crypto-they’re trying to bleed it dry before you even leave the country.
Olav Hans-Ols
October 30, 2025 AT 05:18Man I feel you. I tried sending 0.5 BTC to my Coinbase last month and it just vanished. No error, no email, nothing. Called WazirX support and they said ‘check your FEMA docs’ like that’s a thing people just have lying around. I ended up waiting 3 weeks just to get a bank letter. India’s crypto rules are like a maze with no exit sign. 😅
Kevin Johnston
October 31, 2025 AT 04:3949% gone before you even touch your wallet?! 😱 That’s like paying almost half your salary just to move your paycheck to another bank. Stay strong, crypto fam 💪🚀
Herbert Ruiz
November 1, 2025 AT 03:4430% tax? TDS? GST? You’re all missing the point. Why are you even using Indian exchanges? Just use a VPN, buy on Binance, and withdraw directly. Problem solved. Stop overcomplicating it.
Saurav Deshpande
November 2, 2025 AT 19:23They want us to report everything? Of course they do. This isn’t about taxes-it’s about control. The same government that banned UPI for crypto in 2018 now wants to track every satoshi. They’re scared. They know crypto is the people’s money. This CARF thing? It’s a global surveillance net. They’re not trying to regulate-they’re trying to crush independence. And don’t even get me started on Aadhaar being tied to wallets…
Paul Lyman
November 4, 2025 AT 05:27Guys I just did this last week and it worked fine! I used CoinDCX, paid the 30%, got the TDS receipt, and the GST was only 18% on the withdrawal amount-no extra fees. Just make sure you use the RBI rate on the exact day. I screenshot everything. Also, if you’re under $250k you’re golden. Don’t listen to fearmongers. It’s paperwork, not a prison sentence 🙌
Frech Patz
November 4, 2025 AT 19:50Could you clarify the legal distinction between Virtual Digital Assets under the Income Tax Act and their classification under FEMA? The conflation of property taxation with foreign exchange controls appears to create jurisdictional ambiguity. Is there any judicial precedent interpreting this dual-regulatory framework?
Derajanique Mckinney
November 6, 2025 AT 18:12so like… u just pay all that tax? and they still block u?? like wtf?? 😭 i just wanna send my eth to my friend in canada… why is this so hard??