India Now Requires Reporting of Crypto Assets and Digital Currencies Under FATCA and CRS Rules

What Happened?

The Central Board of Direct Taxes (CBDT) issued Notification No. 19/2026 on March 5, 2026, amending three critical tax rules — Rule 114F, Rule 114G, and Rule 114H — which govern reporting of financial accounts under Section 285BA of the Income Tax Act, 1961. These amendments expand India's FATCA and CRS reporting regime. Starting January 1, 2026, financial institutions in India must now identify and report accounts involving crypto assets, central bank digital currencies (CBDCs), and specified electronic money products held by foreign tax residents.

Shortly after, the CBDT published the comprehensive Income Tax Rules, 2026 under Notification No. 22/2026 (G.S.R. 198(E)), dated March 20, 2026, establishing the new rules framework. This gazette notification from the Ministry of Finance, Department of Revenue carries full legal force and represents the authoritative legal instrument for FATCA, CRS, and automatic exchange of information (AEOI) under Indian tax law. The notification officially supersedes prior iterations and incorporates the full FATCA and CRS expansions critical for automatic exchange of financial account information. These rules align with the Income Tax Act, 2025, effective from April 1, 2026, and incorporate OECD CRS 2.0, the Crypto Asset Reporting Framework (CARF), and US FATCA updates to cover crypto assets and electronic money. In parallel, the CBDT had released draft Rules 238, 239, and 240 on February 27, 2026, which replace the existing FATCA and CRS rules (Rules 114F, 114G, and 114H of the Income Tax Rules, 1962) entirely now that the Income Tax Act, 2025 takes effect on April 1, 2026.

The Income Tax Department has also published comprehensive FAQs and Guidance Notes on Forms under the Income Tax Rules, 2026, providing practical clarification on the various new forms introduced under the new framework. These guidance notes include a structured table listing all 61+ new forms alongside their corresponding old form numbers from the Income Tax Rules, 1962, making it easier for taxpayers and financial institutions to navigate the transition. The FAQs specifically address forms relevant to NRIs, including updated equivalents of Forms 15CB, 15CC, and 10FC, and provide guidance on indicia resolution, self certification of residency, TIN declarations, crypto holdings reporting, and crypto valuation methods.

This means if you are an NRI and you hold any of these digital assets through an Indian financial institution, that institution will share your account details with tax authorities in India and potentially your country of residence.

What Are FATCA and CRS, and Why Should You Care?

Quick refresher for those who need it:

FATCA (Foreign Account Tax Compliance Act) is a US law that requires financial institutions worldwide to report accounts held by US taxpayers. India participates through an Intergovernmental Agreement (IGA) with the United States.
CRS (Common Reporting Standard) is the OECD's global framework for automatic exchange of financial account information between countries. India signed the Multilateral Competent Authority Agreement (MCAA) on June 3, 2015, and has been exchanging account information with over 100 partner countries since 2017. India's AEOI commitments under CRS now cover over 110 reportable jurisdictions, including the United States, United Kingdom, Canada, Australia, and Singapore.

India participates in both. Indian financial institutions already report bank accounts, investment accounts (including demat accounts holding stocks, mutual funds, ETFs, and InvITs), and insurance products held by foreign tax residents. Now, digital assets join that list.

As an NRI, your financial footprint in India gets shared with your country of residence through these frameworks. Adding crypto to the mix means there is essentially no hiding digital asset holdings from tax authorities anymore. If you actively invest in Indian stock markets, mutual funds, ETFs, InvITs, or private placements through Indian brokers or custodians, those accounts already fall under FATCA and CRS reporting. The expanded rules now ensure that crypto and digital asset accounts receive the same level of scrutiny.

The Regulatory Timeline You Need to Know

Multiple notifications and draft rules moved in quick succession. Here is the timeline:

| Date | Event | |---|---| | January 1, 2026 | Expanded reporting start date for crypto assets, CBDCs, and specified electronic money products takes effect | | February 27, 2026 | CBDT releases draft Income Tax Rules, 2026 (including draft Rules 238, 239, and 240 to replace existing FATCA/CRS rules) along with proposed forms for public comments | | March 5, 2026 | CBDT issues Notification No. 19/2026 amending Rules 114F, 114G, and 114H under the Income Tax Rules, 1962 | | March 20, 2026 | CBDT publishes the formally notified Income Tax Rules, 2026 under Notification No. 22/2026 (G.S.R. 198(E)), the authoritative gazette notification from the Ministry of Finance | | March 31, 2026 | Deadline for Reporting Financial Institutions (RFIs) to register with CBDT. Also the recommended deadline for NRIs to review accounts for pre effective disclosures before the new Act kicks in | | April 1, 2026 | Income Tax Act, 2025 takes effect, and new Rules 238, 239, and 240 formally replace the existing FATCA/CRS framework entirely. Applicability begins for FY 2026 to 2027 onward | | May 31, 2027 | First reporting deadline under the new rules for FY 2026 to 2027 | | June 30 / July 31, 2026 | Annual reporting deadlines for RFIs for the prior financial year. Rule 238 (FATCA) requires annual XML reporting to CBDT by July 31 | | July 2027 | First automatic exchange of information under the new framework with partner jurisdictions | | December 31, 2026 | Deadline for RFIs to complete indicia search on pre existing accounts (opened before April 1, 2026) | | Ongoing | Income Tax Department publishes FAQs and Guidance Notes on Forms under the new rules to help taxpayers and institutions navigate the transition |

The practical effect of the January 1, 2026 start date for expanded reporting is already in force under Notification No. 19/2026. The broader overhaul under the Income Tax Act, 2025 formalizes and potentially expands these changes further from April 1, 2026.

The New Rules at a Glance: Rules 238, 239, and 240

The formally notified Income Tax Rules, 2026 replace the old FATCA and CRS provisions with three new rules that NRIs need to understand:

Rule 238 (FATCA)

This rule governs registration of Reporting Financial Institutions (RFIs) via the AIU (Automatic Information Update) portal, due diligence for US person indicia, and annual XML reporting to CBDT by July 31. Rule 238 defines "reportable accounts" broadly, now encompassing not just traditional financial accounts (bank deposits, custodial accounts, insurance contracts) but also digital assets like cryptocurrencies, stablecoins, and CBDCs if they meet value thresholds or generate reportable income. If you are an NRI with US exposure (for example, a 401(k) plan or US brokerage account), your Indian financial institution must check for US indicia such as a US address, US phone number, or US place of birth. NRIs with US person status (for example, green card holders) face stricter FATCA Chapter 4 GIIN registration requirements for entities. Failure to provide proper documentation can trigger 30% FATCA withholding on payments.

For NRIs who invest in Indian mutual funds, ETFs, InvITs, or hold demat accounts with Indian brokers, Rule 238 means your Indian custodian or fund house will report your account details to CBDT, which then shares them with the US under the India US IGA.

Rule 239 (CRS)

This rule handles multilateral AEOI for non US accounts using residency based reporting. Crypto assets held custodially now fall under "Other Account Types" for CRS purposes. The reporting thresholds remain aligned with prior rules: new individual accounts exceeding USD 1 million and pre existing accounts exceeding USD 250,000 receive enhanced scrutiny as high value accounts. RFIs must report NRI controlled foreign accounts annually to CBDT, including balances, interest, dividends, and sales proceeds. Due diligence escalates for high risk indicia like foreign phone numbers or powers of attorney. The rules now include API based residency checks for enhanced due diligence.

For NRIs actively trading on Indian stock exchanges or holding private placements, the CRS reporting captures your demat account balances, dividend income, and capital gains proceeds, sharing them automatically with your country of residence.

Rule 240 (Forms and Procedures)

This rule covers forms and procedures, including self certification updates for NRIs declaring foreign assets. It takes effect immediately for new accounts, with a grace period for legacy accounts until the end of FY 2026 to 2027. All submissions must happen electronically via the Income Tax Department's e filing portal. The rule mandates updated forms including Form 10BA for self certification of tax residency, Form 10BB for institutional reporting, and Form 10FC for jurisdictional deductions and payments. New accounts opened after April 1, 2026 require immediate FATCA/CRS self certification at onboarding, with RFIs required to complete due diligence within 90 days for new accounts. Filing uses XML schema for electronic submission.

What Exactly Falls Under the New Rules?

The amendments expand the definition of financial accounts and financial institutions to cover three new categories:

1. Relevant Crypto Assets

Any crypto asset that can be used for payment or investment purposes, as long as it is not a CBDC or a specified electronic money product. Think Bitcoin, Ethereum, and most tokens you trade on exchanges. The rules align with the OECD Crypto Asset Reporting Framework (CARF) integration, classifying these as virtual digital assets. Crypto assets (for example, Bitcoin holdings exceeding INR 5 lakhs equivalent) and stablecoins become reportable, with valuation at fair market value.

The definition of reportable crypto assets now includes interests linked to crypto, exchanges between crypto and fiat currencies, and exchanges between different cryptos. However, gross proceeds from crypto sales or redemptions may be exempt from CRS reporting if already covered under CARF.

Notably, the definition of Investment Entities has been expanded to include those dealing with crypto assets. However, entities that only effectuate exchange transactions between crypto assets and fiat currencies are excluded from the Investment Entity definition. So a simple crypto to fiat exchange platform may not qualify as an Investment Entity, though it could still fall under other reporting categories.

Crypto holdings in foreign exchanges (for example, Binance) held by NRIs also become reportable if control indicia exist, potentially leading to information exchange with both India and the NRI's country of residence. The rules now extend to crypto wallets linked to Indian exchanges, which get classified as "undocumented accounts" if residency cannot be determined.

2. Central Bank Digital Currencies (CBDCs)

India's own digital rupee (e Rupee) and similar digital currencies issued by central banks of other countries.

3. Specified Electronic Money Products (SEMPs)

Digital representations of fiat currency that are issued when someone deposits funds, can be redeemed at par value, and can be used for payment transactions. Think of prepaid digital wallets and similar products.

The new rules also refine the definition of Depository Accounts to focus specifically on accounts maintained by "Depository Institutions" rather than the broader phrase "financial institution in the ordinary course of a banking or similar business." This narrowing provides clarity on which institutions must comply with CRS reporting requirements.

This significantly widens the scope of entities and assets covered under CRS reporting. If you use any Indian crypto exchange, digital wallet, or CBDC platform, the institution behind it now falls squarely within the reporting framework.

What You Must Do: Action Items for NRIs

1. Update Your KYC Immediately

Contact your Indian bank, mutual fund, insurance company, investment platform, and crypto exchange to update your Know Your Customer (KYC) information. Reporting Financial Institutions must now conduct expanded due diligence to identify NRIs and other foreign tax residents. Provide:

Your current foreign residential address
Foreign tax identification number (TIN) — for example, Social Security Number if in the USA, National Insurance Number if in the UK
Phone number in your country of residence
Place of birth and citizenship
Details of foreign bank accounts (NRE, NRO, or accounts held abroad)

For accounts opened before April 1, 2026, institutions must review existing records for signs of foreign residency by December 31, 2026. If no changes have occurred, they report "nil." For new accounts opened after April 1, 2026, you must provide self-certification at the time of account opening.

Do not delay. Institutions that fail to collect this information by the deadline face penalties up to ₹1 lakh, and they may freeze or close your account if you do not provide self-certification. Additional due diligence under PMLA rules now requires collecting taxpayer identification number (TIN) and date of birth for pre-existing accounts.

2. Self-Certify Your Tax Residency Status

When updating KYC or opening a new account, you will be asked to self-certify your tax residency. This is a legal declaration that you are a tax resident of a specific country (e.g., USA, UAE, UK). Sign and submit this form promptly. Failure to do so results in your account being flagged as "undocumented," which triggers automatic reporting to India's tax authority and your country of residence.

3. Disclose Foreign Assets in Your Indian Tax Return

If you file an Indian income tax return (ITR), you must report foreign assets in Schedule FA (Foreign Assets). This includes:

Foreign bank accounts (balances and interest earned)
Foreign mutual funds and stocks
Foreign real estate
Cryptocurrency holdings
Foreign pensions and annuities

India's tax authority will cross-verify this information against data received from your country of residence under CRS. Mismatches trigger scrutiny under Section 131 (summons) or Section 133(6) (survey).

4. Monitor Cryptocurrency Exchanges and Wallets

If you hold crypto on Indian exchanges (like CoinDCX, WazirX, or Zebpay) or foreign exchanges, those platforms must now report your holdings to Indian tax authorities. Keep records of:

Purchase dates and amounts
Sale dates and proceeds
Current wallet balances
Cost of acquisition

Report this in Schedule FA and in the crypto-specific sections of your ITR (Schedule VDA for Virtual Digital Assets, if applicable).

How Data Flows: India's Automatic Exchange of Information

Here is how the system works:

1. Indian RFI collects your data: Your bank, mutual fund, crypto exchange, or investment platform gathers your account details, balances, and income. 2. Data sent to CBDT: The institution submits a Statement of Financial Transactions (SFT) to India's Central Board of Direct Taxes (CBDT) via the e-filing portal by June 30 each year for the prior financial year. Rule 238 (FATCA) requires annual XML reporting to CBDT by July 31. 3. CBDT exchanges with your country: India's tax authority shares your account information with the tax authority of your country of residence (e.g., IRS in the USA, HMRC in the UK, FRA in the UAE). 4. Your country's tax authority reviews: Your home country's tax authority cross-checks your reported income against the data received from India. 5. You face scrutiny if there are gaps: If your ITR in India or your tax return in your country of residence does not match the reported data, both countries may initiate investigations.

India has signed the MCAA with over 100 jurisdictions, including the United States, United Kingdom, Canada, Australia, and Singapore.

Penalties for Non-Compliance

Failure to comply with FATCA and CRS requirements carries severe consequences under the Black Money Act and Income Tax Act:

30% tax rate on undisclosed amounts
Penalties up to three times the tax owed on unreported income
Account freezes by financial institutions
Potential criminal prosecution for willful non-disclosure
Penalties up to ₹1 lakh for institutions failing to collect KYC information

The stakes are high. Transparency is no longer optional.

Key Takeaways for NRIs

1. Act now: Update your KYC details with all Indian financial institutions before the deadlines (March 31, 2026 for RFI registration, December 31, 2026 for indicia search on pre-existing accounts). 2. Self-certify: Provide tax residency self-certification to avoid account flagging as "undocumented." 3. Disclose everything: Report all foreign assets, crypto holdings, and income in your Indian tax return and your country's tax return. 4. Monitor exchanges: Keep detailed records of all crypto transactions and holdings. 5. Seek professional help: Consider consulting a tax advisor familiar with FATCA, CRS, and crypto reporting requirements to ensure full compliance.

The days of hidden digital assets are over. India's expanded FATCA and CRS framework ensures that crypto and digital currency holdings receive the same reporting scrutiny as traditional financial accounts. Compliance is not just recommended—it is mandatory.