The Central Board of Direct Taxes (CBDT) has released the "Crypto-Asset Reporting Obligations - Guidance Note". The document provides detailed guidance to Reporting Crypto-Asset Service Providers (RCASPs) regarding their reporting obligations under the Income-tax Act, 2025 and Income-tax Rules, 2026.
The guidance note aims to help crypto exchanges, trading platforms, brokers, dealers, and other crypto-asset intermediaries understand and comply with the newly introduced reporting framework under Section 509 of the Income-tax Act, 2025, along with Rules 241 to 244 and Form 167 of the Income-tax Rules, 2026.
Why Has This Framework Been Introduced?
The rapid growth of crypto-assets has created new challenges for tax authorities worldwide. Unlike traditional financial assets, crypto-assets can be transferred and held outside conventional banking systems, making it difficult for tax authorities to track cross-border transactions.
To address this challenge, the OECD developed the Crypto-Asset Reporting Framework (CARF), a global tax transparency framework designed to facilitate the automatic exchange of tax-related information on crypto-asset transactions between jurisdictions. India has actively participated in the development of CARF and has incorporated its requirements into domestic tax laws.
What is a Crypto-Asset?
Under the Income-tax Act, 2025, a crypto-asset is defined as a digital representation of value that relies on a cryptographically secured distributed ledger or similar technology to validate and secure transactions. This broad definition covers cryptocurrencies, crypto tokens, stablecoins, and certain non-fungible tokens (NFTs).
Which Crypto-Assets Are Covered?
The reporting requirements apply to "Relevant Crypto-Assets." However, three categories are excluded:
- Central Bank Digital Currencies (CBDCs)
- Specified Electronic Money Products
- Crypto-assets that cannot be used for payment or investment purposes, as determined by the RCASP
The guidance note clarifies that NFTs traded on marketplaces are generally treated as Relevant Crypto-Assets and may therefore fall within the reporting framework.
Who Must Comply?
The framework introduces the concept of a Reporting Crypto-Asset Service Provider (RCASP).
An RCASP includes any individual or entity that, as a business, facilitates exchange transactions involving crypto-assets for customers. This may include:
- Crypto exchanges
- Crypto brokers
- Market makers
- Operators of crypto ATMs
- Trading platforms facilitating crypto transactions
The rules apply whether the service provider acts as a principal, intermediary, counterparty, or platform operator.
When Will an RCASP Be Required to Report in India?
The guidance note specifies that an RCASP will have a reporting nexus in India if it is:
- Tax resident in India,
- Incorporated or organised under Indian laws,
- Managed from India,
- Required to file income-tax returns in India, or
- Operating through a regular place of business in India.
Special provisions have also been prescribed to avoid duplicate reporting when an RCASP has reporting obligations in multiple jurisdictions.
Identification of Reportable Users
RCASPs will be required to identify reportable users and reportable persons. These include crypto-asset users and, in certain cases, controlling persons of entity users who are residents of foreign jurisdictions. The framework closely aligns with international reporting standards such as CRS and FATCA.
The guidance note also requires RCASPs to conduct due diligence procedures and collect valid self-certifications from users to determine their tax residency status and reporting obligations.
Record Retention Requirement
RCASPs must maintain all relevant documentation, user information, and transaction records for at least seven tax years after the reporting period. This obligation continues even if the service provider ceases operations or is liquidated.
Reporting Through Form 167
Once reportable users have been identified, RCASPs must furnish prescribed information through Form 167 under Rule 243 of the Income-tax Rules, 2026. The information includes details of the reporting entity, reportable persons, and relevant crypto-asset transactions.
A Major Step Towards Global Tax Transparency
The release of the guidance note marks India's formal implementation of the Crypto-Asset Reporting Framework and signals increased scrutiny of crypto-asset transactions from a tax compliance perspective. By requiring crypto intermediaries to collect, verify, retain, and report transaction information, the government aims to close information gaps and strengthen international tax cooperation.
Crypto exchanges, wallet providers, brokers, and other service providers operating in India should carefully review the guidance note and assess their compliance readiness, as the new framework introduces extensive due diligence, reporting, and record-keeping obligations that align India with emerging global standards for crypto-asset reporting.
Click here to download the Guidance Note
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