Crypto on foreign exchanges: Schedule FA and your ITR
Using an offshore crypto exchange? How Indian residents are taxed on foreign crypto, whether to disclose it in Schedule FA, and the risks to know.
- Checked against the rules: Jul 2026
- Sources cited · No buy or sell calls
- Tax year 2026–27
Many Indian investors use offshore exchanges for wider coin choices or derivatives. That's not illegal in itself, but it brings extra tax and compliance questions.
You're taxed on worldwide income
If you are a resident and ordinarily resident in India, your global income is taxable here. Gains from selling or swapping crypto on a foreign exchange are taxed exactly like gains on an Indian one: 30% plus cess, with no set-off of losses. Report them in Schedule VDA. See the Schedule VDA guide.
The TDS gap
Indian exchanges deduct 1% TDS on your sales. Most offshore exchanges don't. That doesn't mean you avoid tax. It means you have no TDS credit to offset, and you must pay the full tax yourself, possibly as advance tax during the year. On peer-to-peer trades with Indian counterparties, the buyer is technically responsible for TDS. See how crypto TDS works.
Schedule FA: should you disclose?
Schedule FA is where residents disclose foreign assets: bank accounts, shares, financial interests and more. Whether crypto on a foreign exchange, or in a self-custody wallet, counts as a "foreign asset" isn't clearly settled, because crypto has no obvious location.
The cautious approach many tax professionals recommend is to disclose holdings on foreign exchanges in Schedule FA, listing the exchange's name and country, the account details and the peak and closing values during the year. Over-disclosure carries little risk. Under-disclosure of foreign assets can be expensive under the Black Money Act, which has a penalty of up to ₹10 lakh. The Finance (No. 2) Act, 2024 eased this for smaller holdings, giving relief where the total value of such foreign assets, other than immovable property, is up to ₹20 lakh. Check the current thresholds with a professional before relying on them.
The registration question
Since 2023, crypto platforms serving Indian users, including offshore ones, must register with the Financial Intelligence Unit (FIU-IND) under India's anti-money-laundering law. Several large offshore exchanges were issued notices and had their websites blocked for not registering, and some later registered after paying penalties.
Before using any platform, check its status. Read how to check if an exchange is FIU-registered.
CARF: offshore data is coming
India has committed to the OECD's Crypto-Asset Reporting Framework, under which tax authorities exchange information about residents' crypto accounts abroad. Offshore activity will become increasingly visible to the Indian tax department, so the safest assumption is that it will be seen.
Practical checklist
- Download full transaction histories from every foreign platform each year.
- Convert every transaction to rupees using a consistent, documented exchange rate.
- Report all transfers in Schedule VDA, and pay tax on gains, including advance tax if large.
- Disclose foreign exchange holdings in Schedule FA, following professional advice.
- Prefer FIU-registered platforms.
See the complete crypto tax guide for the underlying rules.
Frequently asked questions
Is it illegal to use a foreign crypto exchange?
Using one isn't illegal for individuals, but platforms must register with FIU-IND to serve Indian users. Unregistered platforms may be blocked, and your funds can be harder to recover if something goes wrong.
Does Schedule FA use the financial year?
Schedule FA uses the calendar year (January to December) for many foreign assets, unlike the rest of the ITR. Check the form's instructions each year.
What exchange rate should I use?
Use a consistent, reasonable source, such as the RBI reference rate or the SBI TT buying rate on the transaction date, and note it in your records.
Do I report crypto on a foreign exchange in my ITR?
Residents must report foreign assets in Schedule FA. Many advisers include crypto held on foreign exchanges, even though the law doesn't name it directly.
What if I forgot to report foreign holdings?
Penalties under the Black Money Act can apply. Filing a revised or updated return soon is the usual fix. Talk to a CA.
Sources
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