CBDT releases guidance for crypto service providers on tax reporting
27 Jul 2026, 01:18 PMThe guidance sets out procedures for identifying reportable users, determining account ownership in different cases, and addressing reporting obligations for cross-border transactions.
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The Central Board of Direct Taxes (CBDT) has issued a guidance note to help crypto-asset service providers comply with the reporting requirements under the Income-tax Act, 2025.
The guidance also marks India's implementation of the Organisation for Economic Co-operation and Development's (OECD) Crypto-Asset Reporting Framework (CARF), which enables the automatic exchange of tax-related information on crypto-assets between participating countries.
The CBDT clarified that the guidance does not introduce a new tax regime for virtual digital assets. Instead, it explains how Reporting Crypto-Asset Service Providers (RCASPs), including crypto exchanges and other intermediaries, should identify reportable users, conduct due diligence, and report transactions in accordance with the Income-tax Act, 2025 and the Income-tax Rules, 2026.
The guidance defines a crypto-asset as a digital representation of value secured using cryptographically secured distributed ledger technology or similar technology. It also clarifies that only "relevant crypto-assets" fall within the reporting framework, while certain categories, including central bank digital currencies (CBDCs), specified electronic money products, and crypto-assets that cannot be used for investment or payment purposes, are excluded.
Under the framework, RCASPs will be required to identify reportable users, including tax residents of jurisdictions outside India and certain controlling persons of entities, and furnish prescribed customer and transaction details to tax authorities. The guidance also covers reportable retail payment transactions where crypto-assets worth more than $50,000 are used to purchase goods or services through an RCASP.
"India’s commitment to combating tax evasion and protecting its revenue base has remained steadfast. The rapid growth of crypto-assets, however, brought with it a fresh challenge," said Ravi Agarwal, Chairman, CBDT, in the note.
Agarwal added that the cross-border nature of crypto-assets and their ability to operate outside the traditional financial system created new challenges for tax reporting, prompting the G20 to ask the OECD to develop the Crypto-Asset Reporting Framework.
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