The Central Board of Direct Taxes (CBDT) has released a new guidance note to help Indian crypto platforms and foreign crypto exchanges operating in India understand their tax reporting responsibilities under the Income Tax Rules, 2026.
The guidance aims to simplify the rules and explain how crypto transactions should be reported.
It also makes it clear that the main responsibility for tax reporting lies with crypto service providers, not individual investors.
Who Is Responsible for Reporting?
According to the CBDT, the primary compliance burden falls on Reporting Crypto-Asset Service Providers (RCASPs).
These include crypto exchanges and platforms that provide crypto-related services.
This means individual investors are not directly responsible for filing these transaction reports. Instead, crypto platforms must collect and report the required information to tax authorities.
The guidance also explains how reporting should work for transactions that involve multiple countries under rules introduced in the Union Budget 2026.
CBDT Explains the Rules in Simple Terms
The guidance note is designed to make tax rules easier to understand for Reporting Financial Institutions (RFIs).
Since the reporting framework is based on the Common Reporting Standard (CRS) developed with the Organisation for Economic Co-operation and Development (OECD), the CBDT has also referred to international guidelines to help institutions comply with the rules.
Who Should Be Treated as the Crypto User?
The CBDT has clarified that a crypto platform should not always treat the account holder as the actual crypto asset user.
If someone is acting as an agent, custodian, nominee, signatory, investment adviser or intermediary on behalf of another person or organisation, the actual beneficiary should be treated as the crypto asset user for reporting purposes.
This ensures that tax reporting reflects the person or entity that truly owns or benefits from the crypto assets.
Rules for High-Value Crypto Payments
The guidance also explains how crypto payments above $50,000 should be reported.
If a crypto platform transfers crypto assets from a customer to a merchant while acting as the customer’s agent, the transaction must be reported as a Reportable Retail Payment Transaction.
However, if the platform is acting as the merchant’s agent, the reporting process changes.
In such cases, the merchant’s customer will be treated as the crypto asset user, and the transaction will be reported accordingly.
Reporting Across Multiple Countries
The CBDT has also clarified how reporting should work when a crypto transaction is connected to more than one country.
If multiple partner jurisdictions are involved, the reporting should be based on the jurisdiction that has the strongest connection with the transaction.
This rule is intended to avoid confusion and ensure that transactions are reported in the appropriate jurisdiction.
FAQs Included for Better Understanding
To make the new rules easier to follow, the CBDT has also included a detailed Frequently Asked Questions (FAQs) section in the guidance note.
The FAQs explain common situations and are expected to help crypto exchanges and financial institutions understand and comply with the new reporting requirements more effectively.
