India Expands FATCA/CRS Reporting to Crypto, CBDCs and Digital Money; Steps Up Checks on $1M+ Accounts

India's tax authority is expanding the scope of international tax information reporting to cover specified cryptoassets, central bank digital currencies (CBDCs) and other digital money products under FATCA and the Common Reporting Standard (CRS), The Economic Times reported. The Central Board of Direct Taxes (CBDT) has updated India's implementation guidance for FATCA and CRS, bringing these digital instruments explicitly within the framework of automatic exchange of information (AEOI). The rules apply to reporting financial institutions, including banks, mutual funds, insurers, custodians and other investment entities. These firms must identify reportable accounts, validate customers' tax residency and share required financial data with overseas tax authorities. The revised guidance also raises the compliance bar for high-value accounts. Reporting entities are now required to conduct additional checks and enhanced review procedures for accounts with balances above $1 million before determining their reporting classification. Processes for confirming tax residency and identifying reportable accounts have also been refreshed across institutions covered by FATCA and CRS. By placing crypto-related products alongside traditional financial instruments already subject to international information-sharing rules, the move tightens cross-border transparency around digital assets. It also aligns with a broader enforcement push by Indian authorities. Recent measures cited in the report include: - A June directive from the Financial Intelligence Unit (FIU) requiring major crypto exchanges to retain records of over-the-counter (OTC) crypto transactions above $10,000 from January 2026, including beneficial ownership, source of funds, transaction purpose and destination wallets (as reported by crypto.news). - Earlier FIU guidance strengthening KYC requirements and periodic customer-record updates under anti-money-laundering rules. - Reuters reporting that the Income Tax Department remains concerned about activity routed through overseas exchanges and private wallets, which has complicated tax enforcement. Government findings indicate that fewer than one-quarter of the 645,000 individuals who traded crypto in the year ending March 2023 disclosed those transactions on their tax returns. India taxes crypto gains at 30% but has yet to introduce a comprehensive digital-asset law. The Reserve Bank of India has repeatedly urged that cryptocurrencies and privately issued stablecoins remain outside the regulated banking system, citing financial stability and monetary sovereignty risks. It has also warned that some stablecoins could be used to obscure taxable profits. The Finance Ministry has said existing tax and legal tools are helping manage virtual-asset risks, with regulators prioritizing tighter reporting, AML controls and tax compliance rather than a single overarching crypto statute. The CBDT's updated FATCA/CRS guidance is the latest step in integrating digital assets into India's international tax-reporting framework. For exchanges, custodians and other financial institutions, the changes increase compliance obligations and intensify scrutiny of high-value and cross-border crypto activity, underscoring that digital-asset tax transparency is becoming a key enforcement focus.