India issues crypto-asset reporting rules aligned with OECD to boost tax transparency

The Central Board of Direct Taxes (CBDT) has released a detailed 198-page guidance note on reporting obligations for crypto-asset transactions, aligning India's tax framework with the Organisation for Economic Co-operation and Development's (OECD) Crypto-Asset Reporting Framework (CARF).

The guidance puts the onus on crypto exchanges—termed Reporting Crypto-Asset Service Providers (RCASPs)—to accurately report all transactions. This will enable tax authorities to automatically exchange information on crypto-asset transactions with other countries starting next year.

For individual taxpayers, there is no additional filing requirement from this guidance. However, experts note that the importance of accurate reporting has increased because tax authorities will now have access to transaction-level data, making data-driven verification more likely.

The framework is designed to increase tax transparency in the crypto sector by imposing obligations on service providers. Tax authorities will gain access to more reliable information on crypto transactions, including those involving offshore exchanges.

Legal definition of crypto assets

India's Income-tax Act defines a crypto-asset as a digital representation of value that relies on a cryptographically secured distributed ledger or similar technology. The OECD CARF includes a similar definition but also covers tokens based on cryptography.

The CBDT clarified that the guidance note does not affect the permissibility or legitimacy of crypto-asset transactions or their regulation.

Key details of the guidance

India already participates in the Automatic Exchange of Information (AEOI) under the Common Reporting Standard (CRS) and FATCA. The new CARF extends these transparency standards to crypto-asset activities.

The 198-page note provides guidance to RCASPs on compliance with section 509 of the Income-tax Act, 2025, and Rules 241 to 244 and Form 167 of the Income-tax Rules, 2026.

CBDT Chairman Ravi Agrawal highlighted the challenge posed by rapid growth of crypto-assets and India's commitment to combating tax evasion. The note aims to help RCASPs understand their obligations clearly.

Implications for exchanges and taxpayers

The guidance includes detailed FAQs on scope, due diligence, reportable users, reporting requirements, filing process, and penalties.

Richa Sawhney, Partner at Grant Thornton Bharat, explained that this is a tax transparency measure, not a broader regulation. The framework differentiates between new and existing users: new users must undergo due diligence and self-certification at onboarding; pre-existing users as of December 31, 2025, have 12 months from January 1, 2026 to complete equivalent due diligence.

Amit Agarwal, Senior Partner at Nangia & Co LLP, cautioned against misconceptions that every crypto transaction is now reportable without thresholds—the guidance specifies reporting only for certain types of transactions and users.