Moving Crypto Assets Abroad from India: Legal Rules You Must Know in 2025

Can You Legally Move Crypto from India to Another Country?

Yes, you can move crypto assets abroad from India-but only if you follow a strict set of rules that changed dramatically in 2025. It’s not illegal to send Bitcoin, Ethereum, or other digital assets overseas. But the government has turned cross-border crypto transfers into a high-risk, high-paperwork process. If you skip even one step, your account could freeze, your funds could be seized, or worse-you could face criminal penalties.

India Treats Crypto as a Taxable Asset, Not Money

India doesn’t recognize cryptocurrency as legal tender. Instead, it classifies it as a Virtual Digital Asset (VDA) under the Income Tax Act. That means every time you move crypto abroad, the government treats it like selling a stock or property. You owe taxes-no matter if you made a profit or not.

Here’s what that looks like in real numbers:

• 30% flat tax on any gain from selling or transferring crypto
• 1% Tax Deducted at Source (TDS) on every transaction over ₹50,000 in a financial year
• 18% GST applied to withdrawals, trades, and staking by Indian exchanges like Bybit since July 2025

And here’s the catch: you can’t offset losses. If you bought Bitcoin at ₹40 lakh and sold it at ₹30 lakh, you still pay 30% tax on the ₹30 lakh. No deductions. No refunds. The tax system doesn’t care if you lost money.

FEMA Rules: The Hidden Wall Between You and Your Crypto

The Foreign Exchange Management Act (FEMA) is the real gatekeeper. Under FEMA, crypto is treated as "intangible movable property." That means moving crypto abroad is legally the same as sending money overseas-except there’s no clear limit on how much you can send.

As of June 2025, Indian residents need prior approval from an authorized dealer bank (like HDFC or ICICI) if they want to transfer crypto worth more than $250,000 in a single year. No exceptions. No loopholes. Even if you split the transfer across multiple wallets or exchanges, the government can still track it.

Why does this matter? Because banks are now required to report all crypto-related outbound transfers to the Financial Intelligence Unit-India (FIU-IND). If you send ₹15 lakh in crypto to a U.S. wallet without paperwork, your bank will flag it. Your account could be frozen. You’ll be asked for proof of source of funds, tax payment receipts, and even your PAN-Aadhaar linkage status.

The Travel Rule: Every Transaction Is Tracked

India is the only major country that applies the FATF Travel Rule to every crypto transaction-no matter the size. That means even if you send ₹500 worth of Ethereum to a friend in Singapore, your exchange must collect and send:

• Your full legal name
• Your physical address or date of birth
• Your PAN number
• Your Aadhaar number
• Your wallet address
• The recipient’s full name and wallet address

Most countries only require this for transactions over $1,000. India doesn’t have that threshold. This is why platforms like WazirX and CoinSwitch are now asking users for proof of address, passport copies, and even utility bills before allowing any cross-border withdrawal.

And if you try to bypass this by using a peer-to-peer (P2P) platform? The Enforcement Directorate is watching. In June 2025, they issued notices to 25 offshore exchanges-including Binance, KuCoin, and Bybit-demanding they comply with Indian KYC rules for Indian users. If they don’t, they’ll be blocked in India.

What Happens If You Don’t Declare Foreign Crypto?

Not reporting crypto held abroad isn’t just a tax mistake-it’s a criminal risk.

Under Section 158B of the Income Tax Act (amended in February 2025), if the tax department finds you own crypto overseas and didn’t report it, you face a 60% penalty on the total value of those assets. That’s not a fine. That’s a tax on top of a tax. For example:

• You hold 3 BTC worth ₹3.6 crore ($430,000) in a U.S. wallet
• You never disclosed it in your ITR
• You get caught: you owe ₹2.16 crore (60%) in penalties, plus 30% tax on any gains, plus interest

And it gets worse. The Income Tax Department now cross-checks data from global tax treaties. India is rolling out the Crypto-Asset Reporting Framework (CARF) and updating the Common Reporting Standard (CRS) to automatically share crypto data with 100+ countries by October 2025. That means if you have crypto in Switzerland, Canada, or the UAE, the Indian government will know-whether you told them or not.

How to Legally Move Crypto Abroad in 2025

If you’re serious about moving crypto out of India, here’s your checklist:

1. Track every transaction-use a crypto tax tool like Koinly or CoinTracker to log buys, sells, and transfers. Save screenshots, wallet addresses, and timestamps.
2. Pay your taxes-file ITR-2 or ITR-3 with Schedule VDA. Report all foreign holdings, even if you didn’t sell.
3. Link your PAN and Aadhaar-your exchange won’t let you withdraw without this.
4. Get bank approval-if your transfer exceeds $250,000 in a year, apply to your authorized dealer bank for FEMA clearance. Keep the approval letter.
5. Use only FIU-IND registered exchanges-WazirX, CoinSwitch, ZebPay are registered. Avoid unregulated P2P platforms for large transfers.
6. Valuation matters-the tax department uses RBI’s daily exchange rate to value your crypto at the time of transfer. Don’t guess. Use official rates.

And don’t assume that using a VPN or a non-Indian exchange will help. Chainalysis reports that 87% of Indian crypto transactions on offshore platforms are now flagged due to IP address tracking and KYC data leaks.

What’s Next? The Crackdown Is Just Starting

The government isn’t slowing down. In 2025, the Enforcement Directorate has already frozen over ₹1,200 crore in crypto assets linked to unreported foreign holdings. Exchanges are shutting down-42% of India’s crypto platforms have merged or closed since January 2025 because they can’t afford the compliance costs.

Experts like Dr. Rajeshree Agarwal warn that India’s tax system is now so heavy that it’s pushing users into underground markets. P2P trading volumes rose 28% in the first half of 2025, even as regulated transfers dropped 32%.

But here’s the reality: P2P doesn’t make you safe. The RBI is training banks to spot P2P patterns. If you’re buying crypto from someone in Delhi and sending it to a wallet in Dubai, that’s still traceable.

Bottom Line: Compliance Is Non-Negotiable

India’s crypto rules aren’t designed to stop people from moving assets abroad. They’re designed to make sure the government gets its cut-and that you can’t hide.

If you follow the rules, you can move your crypto legally. If you don’t, you’re not just risking money. You’re risking your freedom.

Don’t wait until you get a notice from the tax department. Start documenting. Pay your taxes. Get approvals. Use only registered platforms. And remember: what looks like a loophole today could be a trap tomorrow.