India Implements Global Crypto Tax Transparency Rules
The Central Board of Direct Taxes (CBDT) has issued a guidance note to clarify the reporting obligations for crypto exchanges and other intermediaries in India. The note aims to bridge the information gap that existed due to the lack of transparency in crypto transactions.
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.
Crypto exchanges will now be required to collect, verify and report specified information relating to crypto transactions. This includes undertaking customer due diligence, determining the tax residency of users, collecting prescribed KYC and taxpayer information, maintaining records of reportable crypto transactions, and furnishing annual transaction information under Form 167.
The guidance note means that taxpayers should ensure their own tax disclosures accurately reflect those transactions. Taxpayers would be required to continue reporting crypto income in accordance with I-T law, maintain proper records of purchases, sales, transfers and wallet movements, preserve exchange statements and supporting documentation, and ensure the information disclosed in their income-tax return is consistent with the records available with crypto exchanges.