Our Bureau
New Delhi
The Central Board of Direct Taxes (CBDT) has issued a comprehensive 198-page guidance note outlining reporting obligations for crypto-asset service providers under the Income-tax Act, 2025, marking a significant step towards strengthening tax transparency and aligning India’s digital asset reporting standards with global norms.
The guidance is aimed at helping Reporting Crypto-Asset Service Providers (RCASPs), including crypto exchanges and other intermediaries, comply with the Crypto-Asset Reporting Framework (CARF) developed by the Organisation for Economic Co-operation and Development (OECD). The framework is designed to facilitate the automatic exchange of tax-related information on crypto-assets across jurisdictions.
According to the CBDT, the guidance explains reporting requirements under Section 509 of the Income-tax Act, 2025, Rules 241 to 244 of the Income-tax Rules, 2026, and Form 167. It covers the scope of reportable crypto-assets, identification of reportable users, due diligence procedures, compliance monitoring, reporting timelines and frequently asked questions to assist service providers.
Under the new framework, crypto exchanges and other digital asset intermediaries will be required to collect users’ tax residency information and taxpayer identification details and report eligible transaction data annually to the Income Tax Department. The move is expected to improve compliance, curb tax evasion and bring greater transparency to the rapidly expanding crypto ecosystem.
CBDT Chairman Ravi Agarwal said the rapid growth of crypto-assets has created fresh challenges for tax administrations because such assets can be transferred across borders outside the traditional financial system. He noted that India’s G20 Presidency in 2023 accelerated global efforts to implement CARF, with participating jurisdictions targeting information exchange by 2027.
The tax authority clarified that the guidance note does not introduce any new taxes or alter the existing tax regime governing virtual digital assets. Instead, it serves as a compliance document and should not be interpreted as a regulatory framework or an endorsement of crypto transactions. Industry participants have broadly welcomed the clarification, saying it enhances reporting certainty while aligning India with international tax transparency standards.