India to Include Crypto Assets in Financial Reporting by 2026

Mar 10, 2026, 2:49 AM

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India has announced significant changes to its financial account reporting requirements, which will include crypto assets starting in 2026. The update, formalized by the Central Board of Direct Taxes (CBDT), aims to broaden the scope of income tax rules to encompass a variety of digital asset activities, including those linked to cryptocurrencies and CBDCs.

Under the new framework, income streams derived from crypto assets, such as interest and gains from crypto-related holdings, will need to be reported. This reflects India's commitment to a more comprehensive tax reporting system for digital assets, which have grown in popularity and complexity over recent years.

The definition of "financial assets" has been revised to cover CBDCs and various electronic money products. Consequently, service providers in the crypto asset space, along with certain financial institutions, will be required to provide detailed information regarding transactions and balances involving these assets to tax authorities.

The changes also redefine "depository institutions" to include accounts representing electronic money products or holding CBDCs. In certain cases, accounts that maintain CBDCs for customers will be treated similarly to traditional deposit accounts, reflecting the evolving nature of banking in the digital age.

Banks and financial institutions will be expected to monitor these accounts more closely, necessitating a granular approach to tracking holdings, joint accounts, and controlling persons. New conditions have also been established for accounts linked to company formation or capital raising, although some smaller accounts with year-end balances below $10,000 will be exempt from these stricter requirements.

This initiative aligns with global trends where regulatory bodies, such as the International Monetary Fund (IMF) and the Financial Stability Board (FSB), have been advocating for enhanced oversight of crypto-assets to mitigate potential risks to financial stability. The IMF has noted that while the direct impact of crypto-assets on major financial institutions has been limited, their growing complexity and volatility could pose systemic risks if not properly managed.

As policymakers around the world grapple with the implications of digital assets, India’s approach reflects a proactive stance towards regulating this burgeoning sector. The updated rules will apply to non-US accounts, emphasizing the need for compliance with the Prevention of Money-Laundering Act, 2002, which mandates that financial institutions maintain valid records and obtain taxpayer identification numbers and relevant personal information.

In summary, by including crypto assets in financial account reporting, India aims to enhance transparency and compliance in the digital asset space. This shift not only aligns with international regulatory practices but also marks a significant step in the country's evolving financial landscape.

The implementation of these new reporting standards is set to commence in 2026, providing stakeholders ample time to prepare for the changes. As the world increasingly embraces digital assets, India's regulatory framework may serve as a model for other nations looking to address the complexities of cryptocurrency and digital finance.

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