The Income-tax Rules, 2026, notified by the Central Board of Direct Taxes as Notification No. 22/2026 (G.S.R. 198(E)) on 20 March 2026, set out in rules 241 to 244 who must report crypto-asset transactions under section 509 of the Income-tax Act, 2025, what they report and how they identify users. Reporting crypto-asset service providers with an Indian nexus report, for each calendar year from 2026, users who are tax resident outside India, in Form No. 167 by 31 May of the following year. Records must be kept for at least seven tax years.
Why it matters: India has written the OECD's Crypto-Asset Reporting Framework into its tax rules almost word for word, so its exchanges now collect the same data as platforms in Singapore and Hong Kong, a year earlier. R.M.
For Ethereum: Exchanges must report the total value of each foreign-resident user's withdrawals to wallet addresses not known to belong to a service provider or financial institution, which brings self-custody transfers into tax reporting.
Section 509 of the Income-tax Act, 2025 requires prescribed reporting entities to file statements on crypto-asset transactions. It leaves who, what and when to the rules (s 509(1) and (5)). Notification No. 22/2026 supplies them in rules 241 to 244 of the Income-tax Rules, 2026.
Who reports. A reporting crypto-asset service provider is any business that effects exchange transactions for customers, as counterparty, intermediary or trading platform (rule 241(13)). It reports in India if it is tax resident, incorporated, managed or has a regular place of business in India, or acts through an Indian branch (rule 242(1) and (2)). A provider that already reports in a partner jurisdiction is excused in defined cases (rule 242(3)).
Whose transactions. Only users who are tax resident in a country or territory outside India are reportable (rule 241, “reportable person”).
What is reported. For each user and each crypto-asset, the provider reports aggregate values, units and counts of purchases and sales against fiat, crypto-to-crypto trades, transfers in and out, and retail payments above USD 50,000 (rule 243(1)(e)). Amounts are in rupees, net of fees (rule 243(8)).
When. The rules apply to calendar years from 1 January 2026. The statement, or a nil statement, is filed in Form No. 167 by 31 May of the following year (rule 243(1), (6) and (7)).
Due diligence. Providers must get a tax-residence self-certification from new users when the relationship starts, and from existing users within twelve months from 1 January 2026. They check it against their KYC records (rule 244(2)(a)) and keep records for seven tax years (rule 244(12)).
Implications
The rules don’t add reporting on Indian residents. Domestic users’ trades stay visible to the tax department through the 1% TDS. What changes is the data Indian exchanges hand over about foreign users, which India can then exchange with partner jurisdictions once those are notified (rule 241(7)).
The timeline is tight. The rules were notified in March 2026 but cover the whole of 2026. Self-certifications for existing users are due by the end of the year. The first Form 167 filing is due on 31 May 2027. The Finance Bill 2026 penalties of Rs 200 a day and Rs 50,000 apply from the first filing.
The definition of “relevant crypto-asset” in rule 241(9) has the same “or” drafting as the CRS amendment. Read literally, it excludes almost nothing from scope.
For Ethereum
Rule 243(1)(e)(ix) requires the aggregate value and units of a user’s transfers to wallet addresses “not known by the reporting crypto-asset service provider to be associated with a virtual asset service provider or financial institution”. In practice, that means withdrawals to self-custody wallets on Ethereum and other public chains. The address itself is not reported, only the totals. Exchanges will need to classify destination addresses to complete the field.