Indian Tax Authority Enhances Crypto Exchange Reporting Requirements

India's Central Board of Direct Taxes (CBDT) has released new guidance concerning the reporting of cryptocurrencies and other digital assets. The framework, known as the Crypto-Asset Reporting Framework (CARF), aims to increase tax authorities' visibility into crypto markets and ensure proper tax collection.

The new requirements, effective from the start of the 2026 calendar year, will compel crypto service providers, such as exchanges and brokers, to identify reportable users, determine their tax residency, and report specified transactions annually. This reporting must be submitted via Form 167 by May 31 of the following year.

The guidance extends tax authority oversight to include cryptocurrencies, security tokens, and certain NFTs. Service providers will be required to collect and verify customer tax details, including foreign taxpayer identification numbers. They must also report acquisitions, disposals, crypto-to-crypto trades, and transfers, with transaction values denominated in rupees.

Industry stakeholders have generally welcomed the new rules, viewing them as a means to bring greater clarity to compliance and enhance tax transparency. CEO Vikram Subburaj noted that CARF introduces a new cross-border reporting layer to the previously established domestic oversight.

The CBDT emphasized that the guidance does not impose new taxes on digital assets or alter their existing tax treatment. It also does not determine the legality of crypto transactions in India. Although India lacks specific legislation for the crypto sector, industry experts see this as a move towards more responsible regulation.