- The Central Board of Direct Taxes (CBDT) has released a detailed guidance note for Indian crypto platforms and foreign exchanges operating in the country for reporting taxes and transactions under the provisions of the Income Tax Rules, 2026.
- The guidance note operationalises the OECD's Crypto-Asset Reporting Framework (CARF), an international standard designed to improve tax transparency by enabling authorities to track crypto transactions more effectively.
- The primary compliance burden falls on Reporting Crypto-Asset Service Providers (RCASPs), not directly on individual investors.
- The guidance note has been released in line with the crypto asset reporting framework (CARF) outlined by the Organisation for Economic Co-operation and Development (OECD).
- The CBDT stated that the guidance note intends to provide guidance to RCASPs for compliance with the reporting obligations under section 509 of the Income-tax Act, 2025.
- The guidance note is expected to help in global sharing of information on crypto transactions from next year.
- India has taken another step towards tightening oversight of the cryptocurrency sector, this time through tax reporting rather than regulation.
- The guidance note provides much-needed operational clarity for providers, according to industry players.
- Experts noted that while there is no additional filing requirement for taxpayers under this guidance note, the importance of accurate reporting and documentation has increased considerably.
India's Central Board of Direct Taxes (CBDT) has released a comprehensive 198-page guidance note aimed at enhancing tax transparency in the cryptocurrency sector. This guidance operationalizes the OECD's Crypto-Asset Reporting Framework (CARF), which is designed to facilitate the standardized exchange of tax-relevant information on crypto transactions across jurisdictions.12568
The guidance primarily targets Reporting Crypto-Asset Service Providers (RCASPs), placing the compliance burden on them rather than individual investors. It outlines the reporting obligations under Section 509 of the Income-tax Act, 2025, and the Income Tax Rules, 2026, which include identifying users and reporting specified transactions.3
CBDT Chairman Ravi Agrawal emphasized the need for this guidance, stating that the rapid growth of crypto-assets poses challenges to tax compliance and revenue protection. The guidance aims to combat tax evasion while aligning India's reporting standards with international norms.
Industry experts view this as a significant milestone. Edul Patel, CEO of Mudrex, remarked that the guidance is a step towards a more transparent digital asset ecosystem, while Vimal Sagar Tiwari, Co-Founder of CoinSwitch, noted that it provides operational clarity for providers. The guidance does not introduce new taxes but strengthens the integrity of the crypto ecosystem by making it harder to underreport taxable transactions.
As a result, the information reported by RCASPs will be automatically exchanged with tax authorities in users' jurisdictions, enhancing global tax compliance efforts.
“The CBDT's 198-page guidance note outlines compliance obligations for Reporting Crypto-Asset Service Providers (RCASPs) under the Income Tax Act, 2025. This move aims to strengthen oversight of the crypto sector, with industry leaders noting it lays the groundwork for a more structured policy framework without introducing new taxes.”
The Indian Express
