In response to global developments on crypto asset reporting framework and updates to Common Reporting Standard (CRS), the government has amended the Income Tax Rules to widen the reporting framework for financial accounts by bringing crypto assets, central bank digital currency (CBDC) and certain electronic money products within its ambit.
The amendments, notified on March 5, 2026, will take effect from January 1, 2026. The revised rules introduce the concept of relevant crypto-assets, expanding the definition of financial assets to include interests linked to crypto assets. Transactions involving exchanges between crypto assets and fiat currencies, or between different crypto assets, have also been incorporated into the reporting framework.
The notification also mandates entities that hold CBDC or specified electronic money products on behalf of customers may be treated as depository institutions, bringing them within the scope of reporting financial institutions.
To ease compliance for low-risk accounts, the rules provide that certain electronic money accounts with a rolling 90-day average balance of not more than $10,000 may qualify for simplified treatment.
Financial institutions will also be required to maintain additional information for reportable accounts. These include whether the account holder has provided a valid self-certification, whether the account is joint, and the number of joint account holders.
The amended rules further define qualified non-profit entities eligible for certain exemptions if they meet conditions such as tax-exempt status and restrictions on distribution of income or assets.
In addition, the rules clarify that financial institutions may not need to report gross proceeds from the sale or redemption of certain financial assets if the same information is already reported under the Crypto-Asset Reporting Framework (CARF).
These rules form the backbone of India’s reporting obligations under the Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS), which require financial institutions to identify and report accounts held by foreign tax residents.
Sandeep Bhalla, Partner, Dhruva Advisors, says that these amendments significantly expand India’s CRS reporting framework to cover emerging digital assets while maintaining a risk-based compliance approach. “By bringing crypto-assets, electronic money products and CBDCs within the reporting ecosystem, India aims to ensure that cross-border tax transparency keeps pace with the rapidly evolving digital financial landscape,” he says.