Finance Bill 2025 introduces mandatory reporting obligations for crypto-asset transactions under Section 285BAA of the Income Tax Act. A prescribed reporting entity will be required to provide specified details about crypto transactions to the income tax authority within the prescribed time and manner. This amendment aligns with India’s commitment to the Crypto-Asset Reporting Framework (CARF), which facilitates the automatic exchange of tax-related crypto-asset information among jurisdictions. The G20 Leader’s New Delhi Declaration has emphasized the need for swift implementation of CARF, prompting this regulatory change. Rules and forms for compliance will be prescribed under Income Tax Rules, and reporting will commence from a specified date.
Page Contents
- FAQs – Budget 2025: Obligation to furnish information in respect of crypto-asset
- Q.1 What is crypto asset?
- Q.2 What are the amendments proposed in Finance Bill 2025 in context of crypto-asset?
- Q.3 Who will be required to furnish information of crypto asset?
- Q.4 What information will be required to be furnished?
- Q.5 Who is the Reporting Entity?
- Q.6 To whom information is to be furnished by the Reporting Entity?
- Q.7 What type of information is proposed to be furnished?
- Q.8 Whether any rules, forms etc. are proposed to be prescribed?
- Q.9 Why is it being made obligatory to furnish information of crypto asset?
- Q.10 From when will the reporting entity be required to furnish information of crypto-asset?
FAQs – Budget 2025: Obligation to furnish information in respect of crypto-asset
Q.1 What is crypto asset?
Ans. Crypto asset has been defined in section 2(47A) of the Act under the existing definition of Virtual Digital Asset.
Q.2 What are the amendments proposed in Finance Bill 2025 in context of crypto-asset?
Ans. It is proposed that prescribed reporting entity shall provide prescribed information in respect of transaction of crypto-asset for such period and in such time and manner to such income tax authority, as prescribed.
Q.3 Who will be required to furnish information of crypto asset?
Ans. A reporting entity, as may be prescribed under section 285BAA of the Act will be required to furnish information of crypto asset.
Q.4 What information will be required to be furnished?
Ans. Information in respect of transaction in crypto asset as may be prescribed under section 285BAA will be required to be furnished by the Reporting Entity.
Q.5 Who is the Reporting Entity?
Ans. Reporting Entity shall be the entity as prescribed in Income-tax Rules in this regard.
Q.6 To whom information is to be furnished by the Reporting Entity?
Ans. The information is to be furnished to the Income-tax authority as prescribed in Income-tax Rules in this regard.
Q.7 What type of information is proposed to be furnished?
Ans. Information in respect of transaction of crypto-asset for such period as prescribed in Income-tax Rules in this regard is to be furnished.
Q.8 Whether any rules, forms etc. are proposed to be prescribed?
Ans. Yes, rules and forms will be prescribed to furnish prescribed information by the Reporting Entity.
Q.9 Why is it being made obligatory to furnish information of crypto asset?
Ans. India has been included in the list of 52 “Relevant” jurisdictions for the purpose of Crypto-Asset Reporting Framework (CARF). CARF provides for the automatic exchange of tax-relevant information (AEOI) on Crypto-Assets. The G20 Leader’s New Delhi Declaration called for the swift implementation of the CARF. To enable this an amendment is being brought for the prescribed Reporting Entities to furnish information of crypto-asset.
Q.10 From when will the reporting entity be required to furnish information of crypto-asset?
Ans. The Reporting Entity will have to provide information in respect of transaction in crypto-asset after the prescribed date.
