India Adopts Global Rules for Crypto Tax Reporting
The Central Board of Direct Taxes (CBDT) has issued a guidance note to help crypto exchanges and other intermediaries comply with their reporting obligations under the Income-tax Act. The note aims to bridge the information gap that existed because crypto assets could be transferred or held outside the traditional financial system.
The new rules specify that Reporting Crypto-Asset Service Providers (RCASPs) must collect, verify, and report specified information relating to crypto transactions. RCASPs are required to undertake customer due diligence and determine the tax residency of users; collect prescribed KYC and taxpayer information; maintain records of reportable crypto transactions; and furnish annual transaction information under Form 167.
The guidance note operationalises India's adoption of the OECD's Crypto-Asset Reporting Framework (CARF), which seeks to enable automatic exchange of crypto-related tax information among participating jurisdictions. This means that crypto assets will increasingly come within the ambit of structured reporting and global information exchange.