Lobsang Kalsang had set himself ablaze in a Ngaba protest calling for freedom from rule by China.
The protest by a Tibetan man in Dharamsala follows a burning by a college student in Varanasi earlier in July.
The 22-day festival of rituals and dances draws participants from across all regions of Tibet.
He is taken into custody without explanation after being called to police headquarters in Dartsedo.
His remains are being taken to Dharamsala, where they will be cremated in a ceremony on July 26, sources say.
The annual event reflects growing identification with traditional Tibetan identity, sources say.
Authorities warn them of 'severe consequences' if they defy the order as they did three years before.
Authorities cite the need for environmental cleanup, but allow mining to continue on a nearby mountain.
Concerned for Tibetan language rights in Tibetan areas of China, Tenzin Choeying launches a rare protest outside the region.
Kalsang Yarphel had written and performed songs considered subversive by Chinese authorities.
Prayers are held in Lhasa and the Tibetan prefectures of western China, while authorities attempt to close down a horse race.
They vow to petition higher authorities to block the move by local officials, which they call a 'corrupt plot.'
He is handed a three-year term after being accused of writing politically sensitive articles and sending news of protests to outside contacts.