CBDT expands reporting to include crypto-assets and CBDCs
Change
The Central Board of Direct Taxes amended Income-tax Rules, effective January 1, to require financial-account reporting for crypto-assets, central bank digital currencies and certain electronic money products.
Why it matters
The definition of financial assets now includes CBDCs, specified electronic money products and interest from crypto-related assets. Crypto-asset service providers and designated financial institutions are required to report transactions and holdings in those assets to tax authorities. The definition of depository institutions has been expanded to cover accounts representing electronic money or holding CBDC, and CBDC accounts held for customers are treated similarly to deposit accounts in specified cases. Banks and depositories must record detailed information on holdings, joint accounts, controlling persons, equity interests and account types; the requirements apply to existing and new accounts with exclusions for certain depository accounts with year‑end balances below $10,000.
Implications
- • Crypto-asset service providers and designated financial institutions are required to submit transaction and holding reports for crypto-assets, CBDCs and covered electronic money products.
- • Banks and depositories are required to collect and retain detailed data on holdings, joint account structures, controlling persons and equity interests for accounts exceeding the $10,000 year‑end threshold.
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