India has significantly expanded its cryptocurrency tax reporting framework while comprehensive regulation remains elusive, according to legal expert Jaideep Reddy's analysis on CNBC TV18's Crypto Corner. The March 2026 CBDT amendment brought crypto assets, CBDCs, and electronic money products under Rules 114F, 114G, and 114H of the Income Tax Act, representing India's participation in a "multilateral movement" led by the OECD.
The new rules expand financial asset definitions to include relevant crypto assets and incorporate CBDCs into reporting frameworks used by financial institutions under both FATCA and the OECD's Common Reporting Standard. This means crypto holdings on Indian exchanges, CBDC wallets, and qualifying digital money products are now systematically reportable to both Indian tax authorities and foreign jurisdictions through existing information-sharing treaties.
Despite the expanding tax infrastructure, India's taxation regime remains "very restrictive compared to global norms," with the 30% flat tax on gains and 1% TDS driving an estimated 72.7% of crypto trading volume offshore. Budget 2026 added penalty provisions of ₹200 per day for failure to report and ₹50,000 for incorrect reporting, but offered no relief on tax rates.
Reddy emphasized that adoption extends beyond trading, pointing to nearly 12 crore Indians investing in crypto and over 75,000 blockchain professionals in the country. He also discussed the Asset Tokenisation (Regulation) Bill 2026, introduced by AAP MP Raghav Chadha, which proposes a comprehensive framework for tokenized real-world assets, though as a private member's bill, its passage prospects remain uncertain.
