India has included specified crypto assets, central bank digital currencies (CBDCs), and digital money products in its global tax reporting framework. Additionally, it has made financial firms’ compliance and due diligence standards more stringent. Updated instructions for India’s use of the Common Reporting Standard (CRS) and the Foreign Account Tax Compliance Act (FATCA) have been released by the Central Board of Direct Taxes (CBDT). With this, India has brought digital financial assets under international tax reporting obligations.
Under the revised rules, reporting financial institutions such as banks, mutual funds, insurance companies, custodians and investment entities must identify reportable accounts, verify the tax residency of customers and report financial information as part of India’s commitments under the Automatic Exchange of Information (AEOI) framework.
The new guidance also introduces stricter due diligence requirements for high-value accounts. Financial institutions will now have to carry out additional review procedures for accounts with balances exceeding $1 million before deciding whether they qualify for international tax reporting. The move is aimed at improving the accuracy of account classification and strengthening tax compliance.
One of the biggest changes is the inclusion of specified crypto assets, CBDCs and digital money products within the same reporting framework that already applies to traditional financial assets. This means digital financial products will now be subject to cross-border information-sharing rules followed by participating countries.
The revised reporting standards come at a time when India has been steadily increasing regulatory oversight of the crypto sector. Earlier, the Financial Intelligence Unit (FIU) directed major crypto exchanges to preserve records of over-the-counter cryptocurrency transactions worth more than $10,000 from January 2026. The records must include details such as beneficial ownership, source of funds, purpose of the transaction and destination wallets.
The FIU has also strengthened customer verification requirements for crypto platforms by introducing stricter Know Your Customer (KYC) norms and requiring periodic updates of customer records under India’s anti-money laundering framework.
CBDT has issued a revised FATCA & CRS Guidance Note aligned with the Income-tax Act, 2025, Income-tax Rules, 2026 and OECD CRS 2025 amendments. It updates reporting, due diligence, Form 166, FAQs, and guidance for RFIs on digital assets, CBDCs & e-money products.…
— Tax Guru (@taxguru_in) August 4, 2026
Government agencies continue to express concerns over crypto transactions taking place through overseas exchanges and private wallets. According to reports, the Income Tax Department believes such transactions make tax enforcement more difficult because they can obscure beneficial ownership and reduce the visibility of taxable gains. A sizable portion of cryptocurrency investors have not reported their transactions in digital assets on their income tax forms, according to officials.
India has struggled to enact a comprehensive legislation governing digital assets, despite levying a 30% tax on bitcoin earnings. Rather, via taxes, anti-money laundering procedures, and reporting requirements, regulators have progressively increased monitoring. India has aligned its tax reporting structure with the quickly changing digital financial ecosystem and added another crucial layer of compliance by extending FATCA and CRS reporting standards to cryptocurrency assets, CBDCs, and digital money products.
Rejig of global tax reporting rules to cover digital finance https://t.co/eKHuSCzHK4
— Economic Times (@EconomicTimes) August 4, 2026
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