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CBDT crypto classification and reporting standards for exchangescrypto exchange reporting requirements India 2026Form 167 crypto asset reporting IndiaRule 241 crypto asset IndiaRule 243 crypto reportingRule 244 crypto due diligencereporting crypto asset service provider IndiaRCASP Indiacrypto to crypto transaction reporting Indiacrypto to fiat reporting Indiacrypto wallet reporting CBDTexternal wallet reporting Indiacrypto tax residence reportingcrypto transaction reporting to Income Tax DepartmentCBDT reporting requirements for crypto exchanges.

CBDT Crypto Classification and Reporting Standards for Crypto Exchanges in India

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Aug 18, 202614 min read
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CBDT Crypto Classification and Reporting Standards for Crypto Exchanges in India

Complete Framework Under the Income-tax Rules, 2026

India's direct-tax reporting framework for crypto-assets has changed materially in 2026.

From 1 April 2026, the Income-tax Act, 2025 replaced the Income-tax Act, 1961. The Central Board of Direct Taxes (CBDT) notified the Income-tax Rules, 2026 through G.S.R. 198(E) dated 20 March 2026, with effect from 1 April 2026. The Income Tax Department confirms that the 1961 Act stood repealed from that date, subject to transitional and savings provisions. For crypto exchanges and other qualifying crypto businesses, the current framework contains two important but distinct reporting systems: Rule 241 to Rule 244 read with section 509 and Form No. 167 establish the crypto-asset information-reporting and due-diligence framework. Rule 219 and Form No. 142 deal separately with quarterly reporting by a VDA exchange in specified tax-deduction-at-source arrangements. These obligations should therefore be considered separately.

  1. CBDT's Reporting Classification of Crypto-Assets Rule 241 of the Income-tax Rules, 2026 creates specific definitions for crypto-asset reporting. The rules use the expression “relevant crypto-asset” and refer to the definition of “crypto-asset” in section 2(111)(d) of the Income-tax Act, 2025. The notified text of Rule 241(9) states that “relevant crypto-asset” means any crypto-asset: that is not a Central Bank Digital Currency; or is not a specified electronic money product; or for which the reporting crypto-asset service provider has adequately determined that it cannot be used for payment or investment purposes. This is the wording appearing in the notified Rules and is reproduced here without altering its statutory construction. The rules further define a digital representation of value as a crypto-asset representing a right to value where ownership of, or a right to, that value can be digitally traded or transferred. A Central Bank Digital Currency (CBDC) is defined as digital fiat currency issued by a central bank. Specified Electronic Money Product CBDT separately defines a “specified electronic money product”. The definition covers a product satisfying prescribed characteristics relating to a single fiat currency, issuance against receipt of funds for payments, a claim against the issuer in the same currency, acceptance by persons other than the issuer, and redemption at par and on demand pursuant to applicable regulatory requirements. The Rules contain an additional treatment for products created solely to facilitate transfers of customer funds, including a 60-day criterion. The CBDT reporting rules therefore do not simply divide the market into labels such as Bitcoin, stablecoin, utility token or governance token. For the purposes of Rules 241–244, classification is based on the definitions contained in the notified framework.
  1. What Is a “Relevant Transaction”? CBDT defines a relevant transaction broadly as either an exchange transaction or a transfer of relevant crypto-assets. An exchange transaction includes both: crypto-asset against fiat currency, and crypto-asset against another relevant crypto-asset. A transfer is separately defined to cover movement of a relevant crypto-asset to or from a crypto-asset user's address or account where, on the information available to the service provider at the time, the transaction cannot be identified as an exchange transaction. The Rules also define a reportable retail payment transaction as a transfer of relevant crypto-assets in consideration for goods or services where the value exceeds USD 50,000. This means the CBDT reporting architecture covers substantially more than conventional “buy” and “sell” orders.
  1. Who Is a Reporting Crypto-Asset Service Provider? A Reporting Crypto-Asset Service Provider, or RCASP, is defined as an individual or entity that, as a business, provides services for effecting exchange transactions for or on behalf of customers. The definition includes a business acting as a counterparty or intermediary or making a trading platform available. The Rules expressly contemplate businesses such as dealers, crypto-asset ATMs, market-making exchanges, brokers and other entities effecting covered exchange transactions. A “trading platform” includes software or an application through which users can effect exchange transactions. Accordingly, the CBDT reporting definition is based on the activity being carried out and is not restricted to businesses that describe themselves commercially as a “crypto exchange”.
  1. Which RCASPs Come Within India's Reporting Nexus? Rule 242 provides the Indian nexus for the reporting obligation. An RCASP is subject to Rule 243 reporting and Rule 244 due diligence if it is tax-resident in India, incorporated or organised under Indian law, has legal personality in India or an obligation to file a return under section 263, is managed from India, or has a regular place of business in India. The requirements also apply to relevant transactions effected through a branch based in India. Rule 242 contains specific provisions concerning equivalent reporting completed in a notified “partner jurisdiction”.
  1. Who Is a Reportable Crypto User? Under Rule 241, a “reportable user” is a crypto-asset user who is a “reportable person”. The notified definition principally covers an individual or entity that is resident for tax purposes in a country or territory outside India, subject to the exclusions prescribed by the Rules. It also covers specified estates of deceased persons resident outside India. Where an entity has reportable controlling persons, information regarding the entity and those controlling persons can become reportable. The annual Form 167 framework should therefore not be described as a requirement to report every Indian crypto customer identically. The scope is determined through the residence, reportable-person and controlling-person rules in Rule 241 and the due-diligence process in Rule 244.
  1. Form No. 167: Annual Crypto-Asset Reporting Rule 243 applies for each relevant calendar year beginning on or after 1 January 2026. For reportable users and applicable controlling persons, the RCASP must maintain and report prescribed information. The information includes identity information such as the user's name, address, country or territory of tax residence, Taxpayer Identification Number or TIN, and, where applicable, date and place of birth. For an entity with reportable controlling persons, the reporting extends to prescribed details of the entity and the controlling person, including the role through which the person exercises control. The RCASP itself must report its name, address and PAN. Crypto-Asset and Transaction Information For every relevant crypto-asset involved during the reporting year, Rule 243 requires reporting of prescribed aggregate transaction information. Transaction category CBDT reporting information Acquisition against fiat currency Gross amount paid, units and number of transactions Disposal against fiat currency Gross amount received, units and number of transactions Acquisition against another crypto-asset Aggregate fair market value, units and number of transactions Disposal against another crypto-asset Aggregate fair market value, units and number of transactions Reportable retail payment transactions Aggregate fair market value, units and number of transactions Transfers into the user's account/address Fair market value, units and number of transactions, with prescribed categorisation Transfers out Fair market value, units and number of transactions, with prescribed categorisation Transfers to specified external wallets Prescribed aggregate fair market value and units The Rules require reporting by each type of relevant crypto-asset and require transactions to be aggregated within the prescribed reporting categories.
  1. CBDT's Form 167 Transaction Classification Form No. 167 is formally prescribed under Rule 243 as the statement for furnishing information on crypto-asset transactions under section 509. The Form itself provides a detailed transaction-classification structure. Crypto-to-Crypto Transactions Form 167 provides separate fields for crypto-to-crypto in and crypto-to-crypto out. The Form contains exchange-type classifications including: 401 — Staking 402 — Crypto Loan 403 — Wrapping 404 — Collateral. Crypto-to-Fiat Transactions Form 167 separately provides categories for crypto-to-fiat in and crypto-to-fiat out, together with the number of transactions, INR amount, currency code and number of units. Crypto Transfers Into an Account For inbound crypto transfers, Form 167 provides classifications including airdrop, staking income, mining income, crypto loan, transfer from another RCASP, sale of goods or services, collateral, other and unknown. Crypto Transfers Out Outbound transfers are separately classified in Form 167. Categories include transfer to another RCASP, crypto loan, purchase of goods or services other than transactions already treated as reportable retail payment transactions, collateral, other and unknown. Form 167 also contains separate reporting fields for transfer wallets and reportable retail payment transactions.
  1. Identification of the Crypto-Asset Form 167 requires the name of the relevant crypto-asset. It also provides for a Digital Token Identifier, specifying a nine-character identifier, together with an alternative token identifier where the DTI is not known. The instructions state that the crypto-asset name should follow the Digital Token Identifier naming convention where feasible. This creates a standardised asset-identification field in addition to transaction amounts and quantities.
  1. Fair Market Value and Reporting in Indian Rupees Rule 243 specifies how reportable values must be determined. Amounts involving fiat currency are to be reported in Indian Rupees. Where a transaction uses another fiat currency, the conversion is made at the time of the relevant transaction using the applicable State Bank of India telegraphic transfer buying rate. Crypto-to-crypto acquisitions and disposals are also reported using fair market value in Indian Rupees at the time of the transaction. Where an applicable crypto/INR trading pair is maintained, the RCASP uses that reference value. For transfers where that reference is unavailable, Rule 243 prescribes a valuation sequence. It begins with the RCASP's internal accounting book value, followed where necessary by a reliable third-party crypto price source, the most recent valuation made by the RCASP and, as a last resort, a reasonable estimate. Form 167 identifies these alternative valuation methods through codes: 1001 — Book value 1002 — Third-party value 1003 — Recent RCASP valuation 1004 — Reasonable estimate by RCASP.
  1. External Wallet Reporting and Record Retention Rule 243 separately addresses transfers involving external wallet addresses. An RCASP is required to collect and retain external wallet addresses or equivalent identifiers associated with transfers for at least seven years. At the same time, the notified rule expressly states that the wallet addresses themselves are not required to be reported under this provision. The distinction is therefore between record retention by the RCASP and information transmitted in the statutory report.
  1. Tax-Residence Due Diligence Rule 244 contains the due-diligence framework used to identify reportable users. For individual users, the RCASP must obtain a self-certification of tax residence when establishing the relationship. For pre-existing individual crypto users, the Rules provide a 12-month period from 1 January 2026. The RCASP must assess the reasonableness of the self-certification using information available to it, including documentation already collected under applicable AML or KYC procedures. Where circumstances change and the RCASP knows or has reason to know that the original tax-residence certification is incorrect or unreliable, it cannot continue relying on it without obtaining the prescribed replacement certification, explanation or supporting documentation. For entity users, the Rules also provide for tax-residence self-certification and determination of applicable controlling persons. Where required, information collected under AML/KYC procedures consistent with the referenced FATF standards may be used for identifying controlling persons. Textual note: Rule 241 defines a “pre-existing entity crypto-asset user” by reference to a relationship existing as of 31 December 2025, while the notified text of Rule 244(3)(i) presently states “within twelve months on and from the 1st January, 2025” for pre-existing entity users. This article reproduces the notified provisions without construing that wording.
  1. Form 167 Filing Deadline Form 167 is an annual reporting statement. Rule 243 requires it to be furnished by 31 May of the calendar year following the year to which the information relates. Where the prescribed due-diligence process identifies no reportable user or reportable controlling person, the Rules require a nil statement. Accordingly, information for the 2026 calendar year is due by 31 May 2027, based on the filing rule currently notified. The statement is transmitted electronically to the Director or Joint Director of Income-tax (Intelligence and Criminal Investigation) through the designated system and data structure. The RCASP must also communicate details of its designated director and principal officer to the Director General of Income-tax (Systems) and obtain the required number for furnishing the statement.
  1. Form 142: Separate Quarterly Reporting by Crypto Exchanges Form 167 should not be confused with Form No. 142. Form 142 is a PAN-based quarterly form prescribed under Rule 219 for specified Virtual Digital Asset exchanges. Under Rule 219, where an exchange has agreed under the applicable CBDT guidelines to pay tax in relation to a transfer of a VDA owned by the exchange as an alternative to tax otherwise required to be deducted by the buyer, the exchange must furnish the corresponding quarterly statement in Form 142. For this purpose, Rule 219 defines an “exchange” as a person operating an application or platform for transfer of virtual digital assets that matches and executes buy and sell trades on that application or platform. The Income Tax Department's current Form 142 user manual confirms that the form applies to VDA exchanges facilitating buying and selling and agreeing to deposit the tax on behalf of buyers or brokers under the relevant statutory arrangement. Form 142 Filing Schedule The quarterly due dates under Rule 219 are: Quarter ending Form 142 due date 30 June 31 July 30 September 31 October 31 December 31 January 31 March 31 May following the relevant tax year The current Income Tax Department portal provides Form 142 under the Income Tax Act 2025 forms and permits electronic filing through the e-Filing portal.
  1. Relationship With CBDT Notification No. 19/2026 and CARF Before the Income-tax Rules, 2026 came into force, CBDT issued Notification No. 19/2026 dated 5 March 2026, effective from 1 January 2026, amending the then-existing Rules 114F, 114G and 114H. The notification incorporated concepts including relevant crypto-assets, CBDCs and specified electronic money products into India's international tax-information framework. The notification also inserted a rule addressing overlap between financial-account reporting and the Crypto-Asset Reporting Framework (CARF). For specified non-US reportable accounts, gross proceeds already reported under CARF need not be duplicated under the corresponding financial-account reporting provision, subject to the notified conditions. Although the Income-tax Act, 1961 was repealed from 1 April 2026, the Income Tax Department's official transition guidance states that earlier circulars, notifications, instructions and approvals continue to operate under section 536(2)(j) of the Income-tax Act, 2025 to the extent they are not inconsistent with the new Act.
  1. CBDT Reporting Architecture at a Glance Requirement Current framework Main crypto information-reporting law Section 509, Income-tax Act, 2025 Definitions Rule 241 Indian reporting nexus Rule 242 Annual crypto transaction reporting Rule 243 Tax-residence due diligence Rule 244 Annual reporting form Form No. 167 Reporting period Calendar year beginning on or after 1 January 2026 Form 167 deadline 31 May following the reporting calendar year Crypto user identification Tax residence, TIN and prescribed identity information Entity reporting Includes prescribed controlling-person information Asset identification Crypto-asset name and DTI/other identifier Fiat-to-crypto reporting Covered Crypto-to-fiat reporting Covered Crypto-to-crypto reporting Covered Transfers Covered Airdrop classification Included in Form 167 inbound-transfer classification Staking classification Included in Form 167 transaction classifications Mining-income classification Included in inbound-transfer classification Crypto-loan classification Included Wrapping Included in Form 167 exchange-type classification Collateral Included Goods/services transactions Included under prescribed transaction classifications Reportable retail payments Specific category; definition uses USD 50,000 threshold External wallet records Retention for at least seven years Valuation Indian Rupee under prescribed methods Quarterly VDA/TDS reporting Rule 219 and Form 142 International crypto reporting alignment CARF-related provisions and Notification No. 19/2026 The classifications above are tax-information and transaction-reporting classifications under the CBDT framework. They should not be read as a licensing classification or regulatory approval of any crypto-asset or exchange.

Official CBDT / Income Tax Department Reference Links

  1. Income-tax Rules, 2026 — G.S.R. 198(E), dated 20 March 2026: https://www.incometax.gov.in/iec/foportal/sites/default/files/2026-03/En-Notified-IT-Rules-2026-20-03-2026.pdf
  2. CBDT Notification No. 19/2026, dated 5 March 2026: https://www.incometax.gov.in/iec/foportal/sites/default/files/2026-03/Notification-19-2026.pdf
  3. Income Tax Act, 2025 — official Income Tax Department portal: https://www.incometax.gov.in/iec/foportal/help/all-topics/e-filing-services/income-tax-act-2025
  4. Form No. 142 User Manual — Income Tax Department: https://www.incometax.gov.in/iec/foportal/newformpage/forms/form142-um
  5. CBDT Circular No. 13 of 2022 — VDA transactions conducted through exchanges: https://incometaxindia.gov.in/Communications/Circular/Circular-No-13-2022.pdf Information checked: 18 August 2026.
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