On 5 March 2026, the Ministry of Finance notified the Income Tax (Amendment) Rules, 2026, aimed at modernising tax information exchange, expanding the tax reporting net to cover central bank digital currencies (CBDCs), specified electronic-money products, and crypto-assets, and strengthening due-diligence and reporting obligations for financial institutions.
Key Points of Income Tax (Amendment) Rules 2026:
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Effective from 1 January 2026, the Amendment Rules update the Income Tax Rules, 1962, particularly in Rules 114-F, 114-G, and 114-H.
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Rule 114-F is expanded for all non-U.S. reportable accounts, replacing the term ‘financial institution’ with ‘depository institution’ and widening the meaning of ‘depository account’ to include accounts holding specified e-money products and CBDCs.
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New definitions are added, namely:
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Central Bank Digital Currencies (CBDC): digital fiat currency issued by a central bank.
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Relevant Crypto-Asset: crypto-assets that are not CBDCs or specified e-money products and that cannot not be used for payment or investment.
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Qualified Non-Profit Entity: established and operated in India, tax-exempt non-profit with no private benefit and assets restricted to public purposes.
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Specified Electronic Money Product: a digital representation of fiat currency, issued against funds, accepted by third parties, and redeemable at par.
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The Amendment introduces capital-foundation/capital-increase accounts with simplified conditions:
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funds must be blocked
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verified independently
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converted or closed after incorporation
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refunds allowed only to original contributors.
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Definitions are broadened to:
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include crypto asset interests as financial assets
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expand depository institution to cover holders of e money and CBDCs
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exclude crypto exchange services from financial asset activities for non-U.S. accounts
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Rule 114-G is revised to require reporting institutions to:
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report the self-certification status of account holders
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indicate whether an account is jointly held
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specify the role of each controlling person
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classify accounts as new or pre-existing
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disclose gross proceeds from the sale or redemption of financial assets.
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Institutions will also report the role of equity-interest holders in investment entities.
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Reporting will now obtain the Taxpayer Identification Number (TIN) and date of birth for updates mandated under Prevention of Money Laundering Act, 2002.
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For accounts held as of 31 December 2025, controlling-person details will be reported only if this information is already available in the institution’s electronic records.
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Gross proceeds will now not be reported under Rule 114-G if they have already been reported under the Crypto-Asset Reporting Framework (CARF) for non-U.S. accounts.
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Under Rule 114-H, the dates for identifying “other reportable accounts” are revised to:
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1 January 2016, or
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1 January 2026, if the account becomes a financial account solely because of the revised Common Reporting Standard.
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Similarly, the balance-determination cut-off is updated to:
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31 December 2015, or
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31 December 2025, where the account is treated as a financial account solely due to the revised CRS.
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The proviso to 6(a)(ii) now requires institutions to apply similar procedures to identify controlling persons for non-U.S. reportable accounts when PMLA rules do not require this information.
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New clause under sub rule 7, allows institutions, in exceptional cases, to treat new accounts as pre-existing until a self-certification is received.
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Sub rule 9 confirms that information exchanged on crypto-asset transactions is only for tax-administration purposes.