India Extends FATCA/CRS Reporting Net to Crypto, CBDCs and Digital Money

India is tightening its cross-border tax transparency regime by expanding FATCA and Common Reporting Standard (CRS) reporting to specified cryptoassets, central bank digital currencies (CBDCs) and other digital money products. The Central Board of Direct Taxes (CBDT) has refreshed India's implementation guidance for the Foreign Account Tax Compliance Act (FATCA) and CRS, the Economic Times reported. The update effectively places digital financial assets within the same international reporting perimeter as traditional financial instruments. Under the revised guidance, banks, mutual funds, insurers, custodians and other reporting financial institutions must identify reportable accounts, confirm customers' tax residency and disclose relevant financial information under India's commitments to the Automatic Exchange of Information (AEOI) framework. The rules also elevate due-diligence expectations for high-value accounts, requiring enhanced checks where balances exceed $1 million and additional review steps before those accounts are classified for reporting. Procedures for validating tax residency and identifying reportable accounts have been updated across institutions covered by FATCA and CRS. By explicitly naming specified cryptoassets, CBDCs and digital money products, the CBDT is channeling digital-asset activity more directly into existing international information-sharing systems. The change raises compliance demands for exchanges, custodians and other digital-asset service providers, and increases the probability of cross-border tax data sharing tied to crypto activity. The move follows broader efforts to tighten oversight of crypto in India. In June, the Financial Intelligence Unit (FIU) asked major exchanges to retain records of over-the-counter (OTC) crypto trades above $10,000 starting January 2026, including beneficial ownership, source of funds, transaction purpose and destination wallets, according to prior reporting by crypto.news. The FIU has also strengthened KYC and periodic customer-record update requirements under India's anti-money-laundering rules. Tax authorities have pointed to enforcement difficulties linked to offshore exchanges, private wallets and peer-to-peer transactions. Reuters cited internal Income Tax Department documents indicating concern that these flows impede tax collection; the documents said fewer than one-quarter of roughly 645,000 people who transacted in crypto in the year to March 2023 reported those transactions on their tax returns. India taxes crypto gains at 30% but still does not have a single, comprehensive digital-asset law. The Reserve Bank of India has urged keeping cryptocurrencies and privately issued stablecoins outside the regulated financial system, citing financial-stability risks and concerns that foreign-currency-backed stablecoins could weaken monetary sovereignty and obscure taxable profits. Operationally, exchanges, custodians and financial firms are expected to adjust reporting systems, KYC workflows and due-diligence processes to capture and classify the newly covered digital assets. For high-net-worth crypto holders, the $1 million threshold signals greater scrutiny. For regulators and tax authorities, the updated FATCA/CRS guidance adds another mechanism to track cross-border crypto flows and pursue unpaid taxes. The CBDT's revisions underline a compliance-first push to integrate digital financial assets into India's international tax-reporting framework, even as wider debates over crypto regulation continue.