Overview
- The Central Board of Direct Taxes has updated India’s FATCA and CRS guidance to treat specified crypto-assets, central bank digital currencies and digital money products as reportable financial assets under international information-exchange rules.
- Banks, insurers, custodians, mutual funds and other reporting institutions must now identify crypto-related accounts, verify customers’ tax residency and report financial details under India’s automatic exchange of information framework.
- The guidance forces enhanced due diligence for high-value accounts with balances above $1 million, requiring extra review before those accounts are classified for international reporting.
- This regulatory step supplements recent Financial Intelligence Unit orders that told major crypto exchanges to preserve over-the-counter transaction records above $10,000 and follows government findings that fewer than one-quarter of about 645,000 crypto traders disclosed transactions in tax filings for the year ending March 2023.
- India still lacks a comprehensive digital-asset law, taxes crypto gains at 30 percent, and faces policy tension because the Reserve Bank of India has urged keeping privately issued cryptocurrencies and stablecoins outside the regulated financial system.