Dealing in Crypto Assets? Income Tax Reporting Has Become More Detailed

Under the Income Tax Act, 2025, a new information-reporting framework applies to transactions in crypto-assets. Prescribed Reporting Crypto-Asset Service Providers (RCASPs) are required to maintain and report specified information about reportable crypto-asset users and transactions under Section 509 and the Income-tax Rules, 2026.

What Information Will Be Reported?

The reporting framework can capture detailed information about reportable users, including their name, address, country of tax residence, Taxpayer Identification Number (TIN), and certain transaction-related information. The prescribed statement for this reporting is Form No. 167.

The rules apply to relevant calendar years beginning on or after 1 January 2026 and also prescribe due-diligence obligations for identifying reportable users.

What Happens if Information Is Not Reported Correctly?

The compliance framework also carries financial consequences. Under the Finance Act, 2026, failure to furnish the required crypto-asset statement can attract a penalty of ₹200 for every day of continuing default. Furnishing inaccurate information and failing to correct it, or failing to comply with the prescribed due-diligence requirement, can attract a ₹50,000 penalty.

Section 509 further provides that where a reporting entity discovers an inaccuracy after filing its statement, it must inform the prescribed authority and furnish correct information within 10 days.

Why Does This Matter to Crypto Investors?

Although the primary reporting obligation falls on prescribed crypto-asset service providers, the development is equally important for taxpayers dealing in crypto assets.

As transaction-level information becomes part of a structured reporting framework, taxpayers should ensure that their own records of crypto purchases, sales, transfers and other reportable transactions can be reconciled with information reported to the Income Tax Department.

This makes maintaining proper transaction records increasingly important. Differences between information reported by a service provider and income disclosed in the taxpayer’s return may require explanation or reconciliation.

Mardia Global | Tax & Accounting Insights for Businesses in India