India Adopts Global Framework for Cryptocurrency Taxation
The Central Board of Direct Taxes (CBDT) has released guidelines for crypto-asset service providers to comply with the Income Tax Act. The guidance note operationalizes India's adoption of the OECD's Crypto-Asset Reporting Framework (CARF), enabling automatic exchange of crypto-related tax information among participating jurisdictions.
According to Ravi Agarwal, Chairman, CBDT, 'India's commitment to combating tax evasion and protecting its revenue base has remained steadfast.' He notes that assets like cryptocurrencies can be issued, held, and transferred outside the traditional financial system, making them challenging to track.
The guidance note defines a crypto-asset as a digital representation of value relying on cryptographically secured distributed ledger or similar technology. It clarifies that not all crypto-assets are subject to reporting obligations under the Income-tax Act, only 'relevant' ones.
RCASPs must identify reportable users and persons with respect to which they need to report information. This includes transaction information for reportable retail payment transactions exceeding $50,000.