India has widened its international tax reporting framework to include cryptocurrencies, central bank digital currencies and other digital assets, adding a new compliance layer for financial institutions that handle such accounts.
The change brings crypto-related holdings into the reporting structure tied to the Foreign Account Tax Compliance Act and the Common Reporting Standard. Under India’s Automatic Exchange of Information commitments, institutions that already report traditional financial accounts will now have to identify and share tax information linked to digital assets as well.
Crypto added to FATCA and CRS reporting
Under the updated regime, banks, mutual funds, insurance companies, custodians and other financial institutions are required to report crypto-linked accounts alongside conventional assets. The expansion places digital assets within the same broad international tax reporting architecture used for cross-border financial information sharing.
The move aligns India’s approach with FATCA and the Common Reporting Standard, two frameworks used to exchange tax-related account data with foreign authorities. By explicitly covering cryptocurrencies, CBDCs and other digital assets, the rules extend established reporting obligations into a segment that had been outside this part of the system.
Tighter compliance requirements
The new guidelines also raise compliance expectations for reporting entities. Financial institutions must carry out enhanced reviews for accounts with holdings above $1 million, a threshold that signals closer scrutiny under the revised rules.
The changes are also intended to improve how accounts are classified and to increase the accuracy of information shared with foreign tax authorities. That means the update is not only about expanding the asset categories covered, but also about tightening the quality of the reporting process itself.
Part of a wider digital finance agenda
The crypto reporting changes arrive alongside other digital finance reforms in India. The government is also moving to bring back merchant fees on Unified Payments Interface transactions, following proposed amendments to the Payment and Settlement Systems Act.
According to the source article, those amendments are meant to provide a legal basis for charging a merchant discount rate on digital payments. India is also pursuing regulation of social media platforms, indicating that the latest tax reporting update sits within a broader effort to reshape rules across the digital ecosystem.
What is confirmed next
What is confirmed for now is the scope of the reporting expansion and the institutions expected to comply with it. Crypto assets, CBDCs and other digital holdings are now part of the reporting framework tied to India’s AEOI commitments, and covered financial institutions are expected to identify and share the relevant tax information.
The practical next step is implementation by reporting entities, particularly the stricter review of high-value accounts and the updated classification of digital-asset-related holdings before information is passed to foreign tax authorities under FATCA and CRS processes.
Source: Coin Edition