CBDT Cracks Down on Crypto Transactions with New Reporting Framework

The Central Board of Direct Taxes (CBDT) has introduced new guidelines for crypto-asset service providers in India, requiring them to report user transactions and conduct due diligence. The framework, which is part of the Crypto-Asset Reporting Framework (CARF), does not introduce a new tax but rather increases scrutiny on the industry.

Crypto exchanges have welcomed the move, saying it will help build a more transparent and credible digital asset ecosystem in India. Vikram Subburaj, CEO of Giottus.com, noted that the framework will give tax authorities better access to transaction data, including information received from participating overseas jurisdictions.

The new guidelines require Reporting Crypto-Asset Service Providers (RCASPs) to conduct due diligence and submit annual reports by May 31. Pranav Pagaria, Head of Finance & Strategy at CoinDCX, said the framework strengthens reporting and due diligence obligations for crypto-asset service providers, particularly for cross-border and non-resident transactions.

The industry has long advocated for regulatory clarity, and this marks another meaningful step towards a comprehensive framework for digital assets in India. Edul Patel, CEO of Mudrex, noted that the guidance note is focused on tax reporting rather than regulation, laying an important foundation for a broader policy framework.