CBDT Issues Guidelines for Crypto-Accounting Under Income-Tax Act
The Central Board of Direct Taxes (CBDT) has issued guidelines for crypto-asset service providers to comply with reporting requirements under the Income-tax Act, 2025. The guidance note does not introduce a new tax regime but clarifies how exchanges and intermediaries should report transactions in line with existing laws.
India's adoption of the OECD's Crypto-Asset Reporting Framework (CARF) is marked by this move, which aims to facilitate automatic exchange of tax-related information on crypto-assets among participating countries. According to Ravi Agarwal, Chairman, CBDT, India's commitment to combating tax evasion and protecting its revenue base has remained steadfast.
The guidance defines a crypto-asset as a 'digital representation of value' that uses cryptographically secured distributed ledger or similar technology to validate and secure transactions. However, not every crypto-asset falls within the reporting requirements, with only 'relevant crypto-assets' subject to due diligence obligations for Reporting Crypto-Asset Service Providers (RCASPs).
Reporting obligations for RCASPs include identifying reportable users and persons whose information must be submitted to tax authorities. Reportable transactions include those exceeding $50,000 in value, where a customer uses crypto-assets through an RCASP to pay for goods or services.