REF: India's CBDT Crypto Reporting Norms and OECD CARF Operationalization

Summary

India's CBDT issued a 198-page guidance note operationalizing the OECD Crypto-Asset Reporting Framework (CARF) for Reporting Crypto-Asset Service Providers (RCASPs) — converting exchanges into compliance infrastructure — while leaving the existing 1% TDS / 30% gains VDA taxation unchanged.

Key Points

CBDT 198-page guidance note for crypto-asset service providers under Income Tax Act, 2025 / I-T Rules, 2026.
Operationalizes India's OECD CARF adoption — automatic cross-jurisdiction exchange of crypto tax info.
No change to VDA taxation: 1% TDS on specified transactions; flat 30% tax on gains; profit reported by recipient; TDS responsibility on exchanges/intermediaries.
Follows Parliamentary Standing Committee on Finance urging a VDA statutory/regulatory framework (and its earlier SRO recommendation).
Note covers: scope of covered crypto-assets/intermediaries, reporting basis, reportable-person identification, due diligence, furnishing procedure.
Exclusions: CBDCs, specified electronic money products, crypto-assets not usable for payment/investment.
"Reportable retail payment transaction" = transfer of relevant crypto-assets for goods/services exceeding $50,000.
RCASPs must identify reportable users, conduct due diligence, report identity + transaction info.
Aligns India with OECD norms (FATCA/CRS-style); authorisation gateway opens September 2026.
Individual investors: no separate disclosure for merely holding crypto, but accurate reporting/documentation importance rises as tax authorities gain transaction-level access.
Structural shift: exchanges evolve from transaction infrastructure to compliance infrastructure (tax-residency determination, CDD, transaction classification, standardized reporting).
Parallels India's CKYC 2.0 identity initiative (July 25): India assembling digital-tax + digital-identity plumbing for future crypto regulation.

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