CBDT Issues Crypto Reporting Guidelines for Exchanges

“The emergence of crypto‑assets has, in a relatively short span of time, created a new class of holdings that can be acquired, held and transferred outside the traditional financial system…The Crypto‑Asset Reporting Framework (CARF), developed by the OECD at the request of the G20, was conceived to address this gap by providing for the standardised and automatic exchange of tax‑relevant information on transactions in crypto‑assets between jurisdictions.”

“"Taxpayers should continue reporting crypto income in accordance with the existing provisions of the Income‑tax Act; maintain proper records of purchases, sales, transfers and wallet movements; preserve exchange statements and supporting documentation; and ensure that the information disclosed in their income‑tax return is consistent with the records available with crypto exchanges."”

“"The definition of crypto asset is thus functional and does not depend on labels that may be used to describe it, such as cryptocurrency, security token, or non‑fungible token, all of which may be crypto assets. For instance, a token based on cryptography that allows individuals to store value, engage in payments and that does not represent any claims or rights of memberships against a person, rights to property or other absolute or relative rights is a Crypto‑Asset."”