India’s crypto market has expanded quickly in recent years, but the rules around cryptocurrencies are still not fully clear.
Now, the Central Board of Direct Taxes (CBDT) has released detailed guidelines for crypto exchanges and other intermediaries on how crypto transactions should be reported under existing tax laws.
The new guidance is mainly aimed at improving tax reporting and preventing tax evasion. It does not introduce a new regulatory framework for cryptocurrencies.
CBDT Adopts Global Crypto Reporting Standard
According to media reports, the CBDT has also adopted the Crypto-Asset Reporting Framework (CARF) developed by the Organisation for Economic Co-operation and Development (OECD).
This framework allows participating countries to automatically exchange tax-related information about crypto-assets.
The CBDT said India remains committed to tackling tax evasion and protecting government revenue. It added that the rapid growth of crypto-assets has created new challenges for tax authorities.
The guidance defines crypto-assets as digital representations of value that use cryptography and distributed ledger technology, such as blockchain, to validate and secure transactions.
Government’s Stand on Crypto Remains Unchanged
The CBDT noted that the Crypto-Asset Reporting Framework has been accepted by the G20 as an international standard for sharing crypto-related tax information.
However, the Central Government has recently clarified that it has no plans to regulate cryptocurrencies.
According to the government, cryptocurrencies are not recognised as an asset in India, which is why there is currently no proposal to regulate the sector.
Earlier, the Reserve Bank of India (RBI) had expressed concerns about cryptocurrencies and had suggested that they should be banned.
PIB Rejects Viral Claim on Crypto Regulation
The Press Information Bureau (PIB) has also dismissed a viral social media claim that the Finance Ministry had asked the RBI and the Securities and Exchange Board of India (SEBI) to explore regulating cryptocurrencies.
The PIB called the claim false and clarified that no such directive has been issued by the Finance Ministry.
It also reiterated that cryptocurrencies are not recognised as assets in India, and therefore the reports claiming that the government is preparing a regulatory framework are incorrect.