New Delhi: India has tightened oversight of cryptocurrencies by issuing detailed tax reporting guidance for crypto exchanges and other virtual digital asset (VDA) service providers under the Income Tax Act. While the move does not introduce any new taxes or directly regulate crypto assets, industry experts believe it lays the foundation for a broader regulatory framework for the sector.
The guidance, issued by the Central Board of Direct Taxes (CBDT), operationalises the Organisation for Economic Co-operation and Development’s (OECD) Crypto-Asset Reporting Framework (CARF). The framework aims to improve tax transparency by enabling authorities to track crypto transactions more effectively and facilitate the exchange of tax-related information across jurisdictions.
What the new CBDT guidance says
Under the revised reporting framework, crypto exchanges and other VDA intermediaries will be required to collect additional information from users, including their tax residency details and taxpayer identification information. They must also submit annual transaction reports to the Income Tax Department in line with the OECD reporting standards.
The guidance focuses on strengthening compliance and improving transparency rather than altering the existing taxation regime for cryptocurrencies. The current tax structure, including the 30 per cent tax on gains from virtual digital assets and the applicable tax deduction at source (TDS) provisions, remains unchanged.
Industry sees a step towards regulation
Crypto industry executives have welcomed the guidance, describing it as an important milestone for India’s digital asset ecosystem.
According to Edul Patel, CEO of Mudrex, aligning India’s reporting standards with the OECD framework brings crypto assets into a more structured financial reporting system without introducing fresh taxes. He said the move could help policymakers design balanced regulations that protect investors while supporting innovation.
CoinSwitch Co-founder Vimal Sagar Tiwari also said the operational clarity would strengthen the integrity of the crypto ecosystem by making it harder to conceal taxable transactions through compliant platforms, thereby improving transparency and accountability.
Could broader crypto regulation be next?
The guidance comes shortly after a Parliamentary Standing Committee on Finance recommended that the government examine the need for a comprehensive statutory and regulatory framework for virtual digital assets.
Although the CBDT notification deals only with tax reporting obligations, experts believe it signals the government’s gradual move towards a more structured approach to supervising the cryptocurrency industry. Better reporting standards could provide policymakers with more reliable data when framing future regulations.
What it means for investors
For individual investors, the guidance does not change how crypto gains are taxed. However, users of compliant exchanges may be asked to provide additional information related to their tax residency and identification as exchanges strengthen their due diligence processes.
The changes are expected to improve tax compliance, reduce the scope for under-reporting of crypto transactions and bring India’s reporting practices closer to global standards.
Conclusion
The CBDT’s latest guidance marks another step in India’s evolving approach to cryptocurrency oversight. While it stops short of introducing a dedicated regulatory regime, the enhanced reporting framework strengthens tax transparency and could pave the way for a broader policy governing virtual digital assets in the future.