India extends FATCA reporting to crypto assets

TLDR

India has formally added certain crypto assets and CBDCs to its FATCA/CRS-style international tax reporting framework, increasing cross border transparency for Indian-linked digital asset accounts.

1. The Central Board of Direct Taxes (CBDT) now treats specified crypto, CBDCs and digital money like traditional financial assets for FATCA/CRS reporting by banks and other institutions.
2. Indian crypto users and platforms face higher enforcement risk as high value accounts and large OTC trades trigger enhanced due diligence, record keeping and cross border information sharing.
3. The move fits a wider global push to close crypto tax gaps and signals that India may tighten rules further for offshore exchanges and private wallets.

Deep Dive

1. Regulatory Change Explained

CBDT has updated Indias implementation of FATCA and the OECD Common Reporting Standard so that specified crypto assets, central bank digital currencies and digital money products fall inside the automatic information exchange framework, alongside bank and securities accounts. This means reporting financial institutions must identify reportable accounts that hold these digital assets, verify customers tax residency and transmit financial information to partner jurisdictions under Indias AEOI commitments.

For high value accounts with balances above 1 million dollars, the guidance requires enhanced due diligence before classifying them for reporting, adding extra scrutiny on large digital asset holdings. Crypto-related products are therefore being treated much more like conventional financial assets in Indias cross border tax infrastructure, as described in the CBDTs expanded FATCA and CRS rules.

2. Impact On Users And Platforms

Recent steps around this framework already target crypto specifically. Indias Financial Intelligence Unit has directed major exchanges to preserve records of over-the-counter crypto transactions above 10,000 dollars from January 2026, focusing on beneficial ownership, source of funds, purpose and destination wallets. Stricter know your customer and anti money laundering rules now apply to domestic platforms.

For ordinary users, the main change is that digital asset accounts and related income held through banks, insurers, custodians or mutual funds are more likely to be visible to tax authorities at home and abroad, especially at larger sizes. Authorities have noted that fewer than one quarter of 645,000 individuals who used crypto in the year to March 2023 reported it in tax returns, which is the enforcement gap this framework aims to close.

3. Broader Trend And Next Steps

India already taxes crypto gains at 30 percent but still lacks a single comprehensive digital asset law, relying on tax, AML and reporting measures while the Reserve Bank of India argues private cryptocurrencies should remain outside the regulated financial system. The FATCA/CRS expansion further integrates digital assets into that reporting stack without granting them full regulatory status.

Globally, similar trends are visible in places like the United Kingdom under CARF and Nigerias new virtual asset tax rules. For India, the next things to watch include detailed CBDT guidance on which products qualify as specified crypto assets, how offshore exchanges and private wallets are treated, and whether India adopts the OECD Crypto Asset Reporting Framework on top of FATCA/CRS.

Conclusion

Indias decision to fold crypto assets and CBDCs into its FATCA and CRS reporting regime confirms that, at least for tax and AML purposes, digital assets are being pulled into the same international transparency net as traditional finance. For crypto users and platforms linked to India, the direction of travel is toward tighter cross border reporting and smaller gaps between activity and disclosure, so the advantage now lies in understanding these obligations early and watching how enforcement evolves.