Crypto Transactions Now Under CBDT Watch: New Rules

The income tax department has issued detailed guidance on crypto transaction reporting under the Income Tax Rules, 2026, giving greater clarity on how crypto platforms, foreign exchanges and other reporting entities must comply with India’s tax framework. The Central Board of Direct Taxes (CBDT) has aimed the guidance primarily at Reporting Crypto-Asset Service Providers (RCASPs) such as CoinDCX, CoinSwitch, Mudrex and ZebPay, rather than at individual investors. 

The note explains how crypto platforms should identify users, report transactions and handle cross-border reporting obligations in line with international standards. Platforms will be required to identify reportable users, maintain records and submit details of eligible crypto transactions to the tax authorities. The CBDT has based the guidance on the OECD’s Crypto-Asset Reporting Framework, to keep it consistent with global reporting norms. 

What the new guidance covers 

The guidance simplifies compliance for crypto platforms, foreign exchanges and other reporting entities by explaining their responsibilities under the Income Tax Rules, 2026. It also includes a detailed set of FAQs covering user identification, reportable transactions, cross-border reporting and other operational issues. 

Who needs to comply 

Primary responsibility rests with RCASPs, including CoinDCX, CoinSwitch, Mudrex and ZebPay, who must identify reportable users, maintain records and submit transaction details to the tax authorities. 

The guidance also clarifies that operating an account does not automatically make a person the crypto asset user. Where someone acts only as an agent, nominee, custodian, signatory or investment adviser, the actual person or entity on whose behalf the transaction is carried out will be treated as the crypto asset user for reporting purposes. 

High-value crypto payments to be reported 

The CBDT has set reporting rules for retail payment transactions involving crypto assets. If a crypto service provider transfers crypto assets worth more than $50,000 from a customer to a merchant while acting as the customer’s agent. The transaction must be reported as a Reportable Retail Payment Transaction. Where the provider instead acts on behalf of the merchant, the reporting responsibility shifts, and the merchant’s customer is treated as the crypto asset user. 

Rules for cross-border crypto transactions 

For transactions linked to more than one partner jurisdiction, the CBDT has said the jurisdiction with the strongest connection should serve as the primary reporting jurisdiction. Thus, reducing duplication in reporting while improving international tax cooperation. 

What it means for crypto investors 

The guidance introduces no new tax on cryptocurrencies. It sets out how crypto platforms and reporting entities must comply with existing reporting requirements. With the aim of improving transparency, strengthening tax compliance and creating a standardised reporting framework for digital asset transactions. 

Stay updated on tax and regulatory developments affecting Indian investors. Read more market news on PL Capital → 

Disclaimer: Investments in securities market are subject to market risks, read all the related documents carefully before investing.

This is a knowledge-sharing initiative by PL Capital. The information provided is only for educational purposes and should not be considered as financial advice & has no influence on the investment/trading decisions of any investors.

For detailed disclaimers/disclosure and Mandatory terms and conditions please visit our website https://www.plindia.com/regulatory-content/