The guidance provides operational clarity on how financial institutions and crypto service providers should identify, classify and report crypto-related information under the Income-tax Act, 2025 and the Income-tax Rules, 2026.
The guidance does not introduce any new tax on cryptocurrencies or alter the existing tax regime. Instead, it strengthens reporting standards and aligns India with evolving global norms for sharing tax information on crypto-assets.
Why has CBDT issued the guidance?
According to the CBDT, rapid developments in digital assets, electronic payment systems and cross-border financial products have transformed the financial landscape, making it necessary to update India’s tax reporting framework.
The revised guidance incorporates changes made to the OECD’s Common Reporting Standard, including the Crypto-Asset Reporting Framework, and replaces the earlier guidance issued in 2016.
It also reflects provisions under the Income-tax Act, 2025 and the Income-tax Rules, 2026.
What changes under the revised framework?
The updated guidance sets out how crypto-related entities should comply with reporting requirements. It explains what constitutes a “relevant crypto-asset”, the due diligence procedures to be followed, the reporting obligations applicable to crypto service providers and the classification of different types of crypto businesses.
It also provides guidance on avoiding duplicate reporting where an entity undertakes multiple reportable activities.
The document further clarifies that entities managing crypto-assets on behalf of customers may qualify as investment entities under the reporting framework. It also explains how businesses offering multiple services, such as crypto custody and crypto-to-fiat exchange, should determine their reporting obligations.
Does this change crypto taxation?
No. The guidance is focused on tax reporting, not taxation.
India’s existing tax regime for virtual digital assets, including the 30% tax on gains and the 1% tax deducted at source (TDS) on specified transactions, remains unchanged. The revised guidance instead standardises how information relating to crypto-assets is collected, reported and shared with tax authorities under international reporting arrangements.
What does it mean for the crypto industry?
Industry participants say the guidance offers long-awaited clarity on compliance while bringing India closer to global reporting standards.
Punit Agarwal, Founder and CEO of KoinX, an automated crypto tax, portfolio tracking, and accounting platform, said the industry had been preparing for stronger tax reporting requirements for several years.
“CARF is another step towards making crypto reporting globally consistent. Platforms that invest early in robust tax reporting and compliance infrastructure will be better positioned as jurisdictions increasingly exchange crypto tax information.”
He added that the framework represents a structural shift in tax transparency rather than taxation.
“CARF marks the beginning of the end for ‘hidden’ crypto wealth across borders. While it doesn’t introduce a new tax, it fundamentally changes how tax authorities access crypto information. Over the next few years, crypto will become as transparent to tax authorities as traditional financial accounts.”
Edul Patel, CEO of Mudrex, a global cryptocurrency investing and trading platform, said the guidance is a significant step towards integrating crypto-assets into a structured financial reporting framework.
“By aligning reporting standards with the OECD’s Crypto-Asset Reporting Framework (CARF), India is bringing crypto-assets into a structured financial reporting framework without changing the existing tax regime.”
Patel said the guidance, while focused on tax reporting rather than regulation, could help lay the groundwork for a broader policy framework by giving policymakers greater visibility into the sector.
Vimal Sagar Tiwari, Co-Founder of CoinSwitch, a crypto investment and trading platform, said the document provides much-needed operational clarity for crypto service providers.
“The operationalisation of the OECD’s Crypto-Asset Reporting Framework (CARF) is an important milestone that aligns India with evolving global standards on tax transparency.”
According to Tiwari, standardised reporting norms will help create a more level playing field by making it more difficult to underreport or conceal taxable crypto transactions through compliant platforms, while improving transparency and trust across the ecosystem.
