India tells crypto exchanges how to report under new OECD tax framework

India’s tax authority has told crypto exchanges exactly how to report user transactions under a new global tax-sharing framework, releasing a 198-page guidance note that puts the compliance burden on platforms rather than individual investors.

The document outlines how Reporting Crypto-Asset Service Providers (RCASPs) should comply with reporting obligations under the Income-tax Act, 2025, as India prepares for the automatic exchange of tax information with participating jurisdictions.

The guidance, published by the CBDT, explains reporting requirements under Section 509 of the Income-tax Act, 2025, Rules 241 to 244, and Form 167 of the Income-tax Rules, 2026.

While the document provides operational clarity for crypto businesses, officials stressed that it neither creates new tax laws nor establishes a broader regulatory regime for digital assets. Instead, it is designed to strengthen India crypto regulation through improved tax reporting and international cooperation.

India crypto regulation enters new reporting phase

The latest guidance represents one of the most detailed operational documents released under India crypto regulation, offering crypto exchanges and other digital asset service providers a roadmap for meeting their reporting obligations.

According to the CBDT, the guidance has been prepared specifically for Reporting Crypto-Asset Service Providers and draws extensively from the OECD’s Crypto-Asset Reporting Framework commentary and related reference materials.

The document covers a wide range of compliance issues, including which crypto-assets fall within the reporting scope, which businesses are required to report, how reportable users should be identified, due diligence procedures, reporting requirements, filing processes, compliance monitoring, and answers to frequently asked questions.

Importantly, the tax authority clarified that the guidance should serve only as an aid for compliance.

“The document is intended to help Reporting Crypto-Asset Service Providers (RCASPs) comply with reporting obligations and draws on the Organisation for Economic Co-operation and Development’s CARF commentary and related reference material.” — Central Board of Direct Taxes (CBDT)

The release provides greater operational certainty for businesses navigating India crypto regulation, particularly as international tax reporting standards continue to evolve.

OECD framework shapes India crypto regulation

CBDT Chairman Ravi Agrawal said the rapid expansion of crypto-assets has introduced significant challenges for tax authorities worldwide because digital assets can be issued, transferred and held outside conventional financial systems while easily crossing national borders.

He explained that these characteristics increase the risk of transactions escaping the reporting requirements traditionally applied to financial institutions.

“The rapid growth of crypto-assets had created fresh challenges for tax authorities because such assets can be issued, held and transferred outside the traditional financial system and across borders, potentially escaping reporting obligations applicable to conventional financial institutions.” — Ravi Agrawal, Chairman, Central Board of Direct Taxes

Agrawal noted that the Group of Twenty (G20) tasked the OECD with developing the Crypto-Asset Reporting Framework to facilitate the automatic exchange of tax information involving crypto-assets between jurisdictions.

He also highlighted India’s role during its G20 Presidency in 2023, saying it accelerated global momentum toward implementation of the framework.

“The New Delhi Leaders’ Declaration called for the framework’s swift adoption and noted the aspiration of many jurisdictions to begin exchanging information by 2027.” — Ravi Agrawal, Chairman, Central Board of Direct Taxes

India also participated in the framework’s development through the OECD’s Working Party No. 10 and the Global Forum’s CARF Group, reinforcing its contribution to shaping international standards that now influence India crypto regulation.

Guidance focuses on tax compliance, not crypto legality

Despite the extensive guidance, the CBDT emphasised that the publication should not be interpreted as creating new tax rules or changing existing legislation governing crypto-assets.

Instead, it simply explains how existing legal provisions should be implemented under the Income-tax Act, 2025, and the Income-tax Rules, 2026. Where inconsistencies arise, the statutory provisions will take precedence over the guidance note.

The CBDT also made it clear that the document does not determine whether crypto-assets or crypto transactions are legal or permissible in India.

Rather, its purpose is limited to facilitating tax reporting between jurisdictions participating in the automatic exchange of information framework.

That distinction is significant as India crypto regulation continues to evolve across multiple policy areas, including taxation, compliance and financial oversight. While the latest guidance improves clarity for exchanges and other reporting entities, it stops short of establishing a comprehensive legal framework for digital assets.

Instead, the document serves as a technical compliance manual designed to help crypto businesses satisfy their reporting obligations while supporting India’s commitment to international tax transparency under the OECD’s Crypto-Asset Reporting Framework.