Despite the lack of domestic Bitcoin ETFs, Indian investors can still gain exposure to such financial instruments through international markets. The Liberalised Remittance Scheme (LRS) of the RBI permits resident individuals to invest up to $250,000 per financial year in foreign assets, including stocks and ETFs. This provision enables investors to allocate funds to Bitcoin ETFs listed on international exchanges.
To do so, investors can open accounts with foreign brokerage firms that offer access to these ETFs. It’s important to note that remittances exceeding ₹7 lakh in a financial year are subject to a 20% Tax Collected at Source (TCS), which can be adjusted against the investor’s overall tax liability. Additionally, gains from these investments are subject to taxation under Indian law, with short-term capital gains taxed according to the investor’s income slab and long-term gains typically taxed at 20% with indexation benefits.
