CBDT issues guidance note on crypto-asset reporting under I-T Act, 2025

The 198-page guidance note explains reporting obligations for crypto service providers under the Income-tax Act, 2025, in line with the OECD's Crypto-Asset Reporting Framework

The Central Board of Direct Taxes (CBDT) has issued a 198-page guidance note to help reporting crypto-asset service providers (RCASPs) comply with their reporting obligations under the Income-tax (I-T) Act, 2025, as India moves towards implementing the Crypto-Asset Reporting Framework (Carf), developed by the Organisation for Economic Co-operation and Development (OECD) for the automatic exchange of tax information on crypto-assets.

 

The guidance note explains the reporting requirements prescribed under Section 509 of the I-T Act, 2025, Rules 241 to 244, and Form 167 of the I-T Rules, 2026.

 

According to CBDT, the document has been prepared to explain the reporting obligations of RCASPs in a simple manner and facilitate compliance. The guidance also draws on the OECD’s Carf commentary and other relevant reference material, as the framework was jointly developed by participating jurisdictions, including India.

 

 

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, as such assets can be issued, held, and transferred outside the traditional financial system, across national borders, and 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 OECD to develop Carf as a dedicated framework for the automatic exchange of information on crypto-assets, he said.

 

Agrawal said India’s G20 presidency in 2023 gave further momentum to the implementation of Carf, with the New Delhi Leaders’ Declaration calling for its swift implementation and noting the aspiration of a sizeable number of jurisdictions to commence exchanges by 2027. He added that India had actively contributed to the development of the framework through its participation in the OECD’s Working Party No. 10 and the Global Forum’s Carf Group. The guidance note, he said, would facilitate the effective implementation of the reporting framework and reinforce India’s standing in global tax transparency.

 

The guidance note contains detailed chapters on the scope of crypto-assets covered, intermediaries and other service providers required to report, identification of reportable persons, due diligence procedures, reporting requirements, procedures for furnishing reports, compliance monitoring, and a comprehensive set of frequently asked questions (FAQs).

 

CBDT clarified that the guidance note does not introduce any new tax provisions or alter the legal position governing crypto-assets. It also said that, in the event of any inconsistency between the guidance note or its FAQs and the provisions of the I-T Act, 2025, or the I-T Rules, 2026, the statutory provisions would prevail.

 

The tax authority further emphasised that the document should not be construed as determining the permissibility or legitimacy of crypto-asset transactions, nor should it be treated as a regulatory framework for the sector. “The purpose of the guidance note and FAQs is only to facilitate the RCASPs in complying with the relevant provisions of the I-T Act, 2025, and the I-T Rules, 2026, and is limited to the exchange of information for the administration of taxes by the relevant jurisdiction, as stated in Rule 244(14) of the I-T Rules, 2026," the note said.

 

Industry executives welcomed the move, saying it lines up India with global tax transparency standards without altering the existing tax regime. Edul Patel, chief executive officer of Mudrex, said the guidance note is a major step towards building a more transparent and credible digital asset ecosystem in India. “By aligning reporting standards with OECD’s Carf, India is bringing crypto-assets into a structured financial reporting framework without changing the existing tax regime.”

 

“While 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,” Patel said.