India updates tax reporting rules to include crypto assets and CBDCs
India has expanded its global tax reporting framework to include specified crypto-assets, central bank digital currencies, and digital money products under updated FATCA and Common Reporting Standard rules.
- India’s CBDT has expanded FATCA and CRS reporting rules to include specified crypto assets, CBDCs, and digital money products.
- Banks, insurers, custodians, mutual funds, and other reporting institutions must follow updated account identification and tax residency verification requirements.
- High value accounts with balances above $1 million will be subject to enhanced due diligence before being classified for reporting.
- The revised framework follows recent regulatory actions that increased oversight of crypto transactions, offshore trading, and large OTC deals.
The Economic Times reported that the Central Board of Direct Taxes (CBDT) has revised India’s implementation guidance for the Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS), bringing specified crypto-assets, central bank digital currencies (CBDCs), and digital money products within the scope of international tax reporting.
The updated guidance sets out revised compliance requirements for reporting financial institutions, including banks, mutual funds, insurance companies, custodians, and other investment entities. Under the framework, such entities must identify reportable accounts, verify customers’ tax residency, and report financial information as part of India’s commitments under the Automatic Exchange of Information (AEOI) framework.
In addition, the revised rules require reporting institutions to apply enhanced due diligence to high-value accounts with balances exceeding $1 million. The guidance calls for additional review procedures before such accounts are classified for reporting.
The latest changes expand the range of financial products covered under India’s international tax reporting regime as authorities continue updating compliance standards for digital financial assets.
High-value accounts will face additional review
Alongside the expanded reporting scope, the revised guidance introduces tighter due diligence obligations for reporting financial institutions.
According to the CBDT guidance cited by The Economic Times, institutions will be required to perform additional checks on high-value accounts exceeding the $1 million threshold. Those reviews are intended to strengthen account classification and tax reporting before financial information is exchanged with foreign jurisdictions.
The framework also provides updated procedures for validating tax residency and identifying reportable accounts across financial institutions covered by FATCA and CRS obligations.
While the guidance focuses on tax reporting requirements, it also places crypto-related products alongside traditional financial assets that already fall under international information-sharing rules.
The update follows recent crypto compliance measures
The revised reporting framework arrives after several regulatory actions targeting cryptocurrency transactions and compliance.
As previously reported by crypto.news, India’s Financial Intelligence Unit directed several major crypto exchanges in June to preserve records of over-the-counter cryptocurrency transactions exceeding $10,000 from January 2026 onward. The request focused on beneficial ownership, source of funds, transaction purpose, and destination wallets, extending regulatory attention to large private crypto trades conducted outside public exchange order books.
Earlier guidance from the FIU had also introduced stricter customer verification requirements for crypto platforms, including stronger know-your-customer procedures and periodic customer record updates under the country’s anti-money laundering framework.
More recently, Reuters reported that internal government documents showed the Income Tax Department remained concerned about cryptocurrency transactions conducted through overseas exchanges and private wallets, saying such activity continued to make tax enforcement more difficult.
According to the report, tax authorities also found that fewer than one-quarter of the 645,000 individuals who carried out cryptocurrency transactions during the financial year ending March 2023 disclosed those transactions in their income tax returns. Officials cited offshore exchanges, private wallets, and peer-to-peer transactions as factors that make it harder to identify beneficial owners and recover taxes.
India’s crypto policy debate continues
The latest tax reporting changes come as policymakers continue debating the country’s long-term approach to digital assets.
Reuters previously reported that the Reserve Bank of India has maintained its recommendation that cryptocurrencies and privately issued stablecoins should remain outside the regulated financial system. Internal government documents reviewed by the news agency showed the central bank continues to raise concerns over financial stability while also warning that foreign currency-backed stablecoins could affect monetary sovereignty and that wider stablecoin use could make crypto profits harder to detect for tax purposes.
India currently imposes a 30% tax on cryptocurrency gains but has yet to introduce a comprehensive law governing digital assets.
While the Finance Ministry has previously stated that existing tax and other legal measures have helped contain risks associated with virtual digital assets, regulatory oversight has continued through tax, anti-money laundering, and reporting requirements instead of a dedicated crypto law.
The CBDT’s revised FATCA and CRS guidance adds another compliance layer by extending international tax reporting obligations to specified crypto-assets, CBDCs, and digital money products, placing digital financial assets more firmly within India’s existing cross-border tax reporting framework.
