- The Government of India notified amendments on March 05, 2026.
- Their effective date is January 01, 2026.
- Extended coverage offers more clarity on digital assets.
The Indian Government has amended tax rules for digital assets in response to the overall reporting framework and updates to CRS, an acronym for Common Reporting Standard. It has also clarified simple compliance for low-risk accounts while setting important guidelines for financial institutions. Market experts have hailed the move by underlining the catch-up in terms of pace.
Amendment by the Government of India
The Government of India has taken a major step by covering, or expanding the coverage of, digital assets under the amended tax rules. Notified on March 05, 2026, the amendments are scheduled to go into effect from January 01, 2026. They expand the definition of financial assets to include crypto assets along with the transaction involving exchanges with fiat currencies.
The notification further includes the treatment of financial institutions holding CBDC or electronic money products on behalf of customers. These will be taken into account as depository institutions so that they are within the prescribed scope.
Most importantly, amendments have provided rules for low-risk accounts, giving them a rolling 90-day average balance – as specified – for simple treatments.
More Details on Compliance and Amendment
The amendment goes on to cover non-profit entities. It specifies their eligibility for exemptions if they meet the status plus restriction on the distribution of assets or income. Financial institutions may also not be required to report gross proceeds if they have already done so under the CARF, an acronym for Crypto-Asset Reporting Framework.
Simply put, new rules work to bring crypto assets into the framework of compliance and reporting structure. The objective is to stay updated with the global developments on the reporting framework of crypto assets. Amendments are likely to offer more clarity to Indian customers and financial institutions.
Interestingly, Trump is also working to make America the global crypto capital.
Experts Speak
A partner at Dhruva Advisors, Sandeep Bhalla, has said that amendments significantly expand the CRS reporting framework of India. He has added that the country now aims to ensure transparency for cross-border tax as the landscape of digital finance evolves rapidly.
Bhalla has further explained that accounts that become financial accounts from the effective date will be treated as new accounts. Those existing prior to the date will be taken as pre-existing accounts, he added.
Sumit Singhania from Deloitte India has called these amendments a step forward in the tax policy of India.
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