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New CBDT rules mandate reporting of crypto holdings and high-value digital wallet balances from January 1, 2026
New Delhi: The Central Government has notified new income tax rules, bringing cryptocurrency traders, digital wallet users, and holders of the digital rupee under a stricter tax reporting framework for the first time.
The amendments to the Income Tax Rules, 1962, were issued by the Central Board of Direct Taxes (CBDT) under the Finance Ministry and published in the official Gazette of India. The new rules will apply retrospectively from January 1, 2026. The move aligns India’s financial reporting system with global standards to track digital asset transactions and prevent tax evasion.
Crypto Exchanges, Banks Must Report Transactions
Under the amended framework, banks, financial institutions and cryptocurrency service providers will now be legally required to report customers’ crypto holdings and transactions to the Income Tax Department.
Any exchange involving digital assets — whether converting cryptocurrency into rupees or swapping one crypto asset for another — will now be treated as a reportable financial transaction.
This effectively brings cryptocurrency platforms into the same reporting ecosystem as banks, mutual funds and other regulated financial institutions.
Digital Wallets to Be Treated Like Bank Accounts
The rules also bring digital wallets and electronic money accounts within the scope of tax reporting. Wallet balances exceeding USD 10,000 (around ₹8.3 lakh) at any point during a financial year will trigger mandatory reporting to tax authorities.
However, wallets maintaining balances below this threshold throughout the year will not face the same compliance requirements, ensuring that additional reporting obligations do not burden most routine digital payment users.
Digital Rupee Recognised Under Tax Rules
The amendments also formally recognise the Digital Rupee, India’s central bank digital currency issued by the Reserve Bank of India.
Financial institutions that hold the digital rupee on behalf of customers will now have to report such holdings to tax authorities, integrating the CBDC into the country’s tax compliance framework.
Part of Global Push to Monitor Digital Assets
The reforms are part of a broader international effort led by the Organisation for Economic Co-operation and Development (OECD) to establish global reporting standards for digital assets.
Many countries across Europe, Asia and the Americas are implementing similar systems to ensure transparency in cross-border digital asset transactions. Tax experts say the new rules close a major gap in India’s financial reporting architecture.
“Until now, there was no structured mechanism to track crypto holdings like bank accounts. These rules bring digital assets into the formal reporting system,” a tax consultant said.
Relief for Non-Profit Organisations
The notification also introduces a category called Qualified Non-Profit Entity, under which eligible organisations working in charitable, religious, educational or social welfare sectors will receive limited exemptions from certain reporting requirements after formal verification by the Income Tax Department.
The government has clarified that information exchanged between tax authorities regarding crypto transactions will be used only for tax administration purposes, providing an additional safeguard for user privacy. The Income Tax (Amendment) Rules, 2026, were formally notified on March 5, 2026.
