India Widens Tax Reporting Scope to Include Crypto Assets and CBDCs

India has updated its tax reporting rules to include crypto assets and central bank digital currencies (CBDCs), expanding the scope of international tax reporting under the Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standard (CRS). According to revised guidance from India's Central Board of Direct Taxes (CBDT), banks, insurers, custodians, mutual funds, and other reporting institutions must follow updated account identification and tax residency verification requirements.

High-value accounts with balances above $1 million will be subject to enhanced due diligence before being classified for reporting. The revised framework follows recent regulatory actions targeting cryptocurrency transactions, offshore trading, and large over-the-counter deals. Reporting financial institutions are required to identify reportable accounts, verify customers' tax residency, and report financial information as part of India's commitments under the Automatic Exchange of Information (AEOI) framework.

The updated guidance also introduces tighter due diligence obligations for reporting financial institutions, requiring additional checks on high-value accounts exceeding the $1 million threshold. The revised rules expand the range of financial products covered under India's international tax reporting regime, placing digital financial assets more firmly within the country's existing cross-border tax reporting framework.