The Central Board of Direct Taxes (CBDT) has issued detailed guidance under the Crypto-Asset Reporting Framework (CARF), laying out how crypto exchanges and other virtual digital asset (VDA) service providers will have to report transactions to tax authorities.
The new reporting framework will apply to specified crypto transactions from the 2026 calendar year. Under the rules, service providers must identify reportable users, verify their tax residency, and submit details of specified transactions through Form 167 by May 31 of the following year. The requirements have been introduced under Section 509 of the Income Tax Act, 2025, along with Rules 241 to 244 of the Income Tax Rules, 2026.
According to the CBDT, the framework is designed to improve tax transparency by giving authorities better visibility into crypto transactions, especially those involving cross-border activity. The department has also clarified that the guidance does not introduce a new tax on virtual digital assets or change their existing tax treatment. It is only meant to strengthen tax reporting and information sharing.
The new rules will increase compliance requirements for Reporting Crypto-Asset Service Providers (RCASPs), including crypto exchanges. They will have to collect and verify users’ tax residency details, including foreign taxpayer identification numbers where applicable. They must also report crypto purchases, sales, crypto-to-crypto trades, transfers and certain payment transactions, with all transaction values reported in Indian rupees.
In addition, RCASPs will be required to retain wallet address records for at least seven years, while transfers to unidentified external wallets must be reported in aggregate.
The guidance aligns India’s reporting framework with the Organisation for Economic Co-operation and Development’s (OECD) Crypto-Asset Reporting Framework, a global standard aimed at improving tax transparency and information sharing between countries. Industry executives have welcomed the move, saying it provides greater clarity on reporting requirements.
Giottus CEO Vikram Subburaj said India’s existing 30% tax on VDA gains, 1% TDS, and the inclusion of crypto service providers under the Prevention of Money Laundering Act (PMLA) have already created a domestic compliance framework. According to him, CARF adds a cross-border reporting layer and will require exchanges to integrate customer, banking, trading and blockchain data more effectively.
CoinSwitch Co-founder Vimal Sagar Tiwari said the guidance gives crypto service providers much-needed operational clarity and aligns India’s reporting framework with evolving global standards on tax transparency.
The guidance does not introduce any additional tax filing requirements for individual taxpayers. However, as tax authorities gain access to more transaction-level information, taxpayers will need to ensure that the details disclosed in their income tax returns match the records maintained by crypto service providers.
The latest guidance comes as the crypto industry continues to seek a broader regulatory framework in India. While CARF is focused only on tax reporting and information sharing, industry participants believe the framework is a step towards improving transparency and creating more consistent reporting standards across the country’s digital asset ecosystem.
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