CBDT’s Crypto-Asset Reporting Guidance 

About CBDT’s Crypto-Asset Reporting Guidance 

• Definition of crypto as per Indian law:
  • India’s income tax law defines a “crypto-asset”  as a digital representation of value that relies on a cryptographically secured distributed ledger or a similar technology to validate and secure transactions.
• Definition of crypto as per OECD Crypto-Asset Reporting Framework (CARF):
  • The CARF defines “Crypto-Assets” as “a digital representation of value that relies on a cryptographically secured distributed ledger or a similar technology to validate and secure transactions”, which includes cryptocurrencies, as well as cryptography based tokens.
• About CBDT’s Crypto-Asset Reporting Guidance:
  • Issued by: The guidance has been issued by Central Board of Direct Taxes (CBDT). 
  • Aligned with: It aligns India’s reporting framework with the OECD’s Crypto-Asset Reporting Framework (CARF).
  • Aim: It is issued to help Reporting Crypto-Asset Service Providers (RCASPs) comply with Section 509 of the Income-tax Act, 2025, Rules 241–244, and Form 167 of the Income-tax Rules, 2026.
  • Implications for taxpayers and crypto exchanges:
    • It provides practical guidance to RCASPs on their obligations under the Income-tax Act and Rules, with detailed FAQs addressing the key facets of implementation, including scope, due diligence, reportable users, reporting requirements, filing process and penalties.
    • The guidance does not require taxpayers to make any additional filings with the Income-tax Department.
  • The guidance clarifies that if there is any inconsistency between the Guidance Note/FAQs and the Income-tax Act or Rules, the statutory provisions of the Act and Rules will prevail.

About OECD’s Crypto-Asset Reporting Framework (CARF)

• About: It is a framework developed to extend global tax transparency standards to crypto-assets.
• Developed by: It was developed jointly by participating jurisdictions, including India, working with the Organisation for Economic Co-operation and Development (OECD).
• Objective: Its objective is to ensure annual reporting of tax-relevant information relating to specified crypto-asset activities.
• Features:
  • It builds upon existing international information exchange frameworks such as Common Reporting Standard (CRS) and Foreign Account Tax Compliance Act (FATCA),
  • CARF requires Reporting Crypto-Asset Service Providers (RCASPs) to:
    • Identify their users.
    • Collect tax-related information.
    • Report specified crypto-asset transactions annually.
    • The reported information is automatically exchanged with the tax authorities of the jurisdictions where crypto-asset users are tax residents under international agreements.
  • The framework also differentiates between new and existing users.