Crypto exchanges, companies welcome new crypto-asset reporting framework

CBDT's Crypto-Asset Reporting Framework sets tax reporting norms for crypto firms from 2026, boosting transparency and paving the way for a clearer regulatory framework

Indian crypto exchanges and companies have welcomed the guidelines issued by the Central Board of Direct Taxes (CBDT) on the compliance framework, detailing the reporting and due-diligence obligations of such firms. The Crypto Asset Reporting Framework (Carf) applies to all crypto transactions starting 2026.

 

Carf mandates crypto service providers to identify reportable users and establish their tax residency. The framework is being introduced at a time when tax authorities have limited visibility over cross-border crypto transactions and crypto assets.

 

The framework does not change the existing taxation regime for the sector. While it does not deal with regulatory aspects of the sector, it is being viewed as a step towards formal regulation.

 

“Even though the guidance note is focused on tax reporting rather than regulation, it lays an important foundation for a broader policy framework. As reporting standards become more robust, policymakers will be better positioned to develop balanced regulations that protect investors while enabling innovation. The industry has long advocated for regulatory clarity, and this marks another meaningful step towards a comprehensive framework for digital assets in India,” said Edul Patel, chief executive officer (CEO) of Mudrex, a crypto exchange platform.

 

Industry executives said the move would help investors and companies by reducing the scope for underreporting.

 

“When regulated service providers follow consistent reporting standards, it becomes more difficult to underreport or conceal taxable crypto transactions through compliant platforms. This ultimately benefits responsible investors, compliant exchanges, and regulators by fostering greater transparency and trust in the ecosystem,” said Vimal Sagar Tiwari, cofounder, CoinSwitch.

 

In the foreword to the guidance note, CBDT Chairman Ravi Agrawal said the rapid growth of crypto assets had created a fresh challenge for tax administrations. Because these assets can be issued, held, and transferred outside the traditional financial system and across national borders, and they may escape the reporting obligations applicable to financial institutions under the Common Reporting Standard and the Foreign Account Tax Compliance Act.

 

Recognising this risk, the Group of Twenty (G20) mandated the Organisation for Economic Cooperation and Development (OECD) to develop Carf as a dedicated framework for automatic exchange of information on crypto assets, he said.