The Indian Government has amended tax rules, significantly expanding the Common Reporting Standard (CRS) to include digital assets. Notified on March 05, 2026, and effective January 01, 2026, these changes aim to enhance clarity and compliance for financial institutions. The amendments broaden the definition of financial assets to encompass crypto assets and transactions with fiat currencies.
Financial institutions holding Central Bank Digital Currency (CBDC) or electronic money products for customers will now be considered depository institutions within the reporting scope. The new rules also provide simplified treatment for low-risk accounts, utilizing a 90-day average balance.
Non-profit entities are also addressed, with specified eligibility for exemptions. Financial institutions may be exempt from reporting gross proceeds if already covered under the Crypto-Asset Reporting Framework (CARF). These updates align India with global developments in digital finance reporting and cross-border tax transparency.
Experts view these amendments as a crucial step forward, ensuring the country keeps pace with the rapidly evolving digital finance landscape and promotes transparency.