CA Sansaar
CBDT Updates Income-tax Rules to Cover Crypto and Digital Assets
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The Central Board of Direct Taxes (CBDT), functioning under the Ministry of Finance, has issued a notification G.S.R. 158(E) dated March 5, 2026, introducing amendments to the Income-tax Rules, 1962. These changes have been notified by the Central Government by exercising powers under Section 295 read with Section 285BA of the Income-tax Act, 1961.
The amendments have been introduced through the Income-tax (Amendment) Rules, 2026, which primarily focus on expanding the scope of financial reporting to include crypto-assets, digital currencies, and electronic money. The revised provisions will be applicable from January 1, 2026.
As part of the amendment, important revisions have been made to Rule 114F, Rule 114G, and Rule 114H of the Income-tax Rules.
Amendments to Rule 114F
The notification brings notable modifications to Rule 114F, which lays down the framework for financial institutions to report details of foreign accounts under the Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS). These provisions require reporting entities to disclose information related to U.S. reportable accounts, including the requirement of self-certification by account holders. The amendment revises certain definitions within this rule to incorporate new forms of digital financial assets.
Changes to Rule 114G
Rule 114G deals with the reporting obligations of financial institutions regarding reportable accounts, including income such as interest, dividends, and other financial returns. Under the revised provisions, institutions must also disclose whether the account holder has submitted a valid self-certification. Additionally, if the account is jointly held, the report must mention that it is a joint account along with the number of joint holders.
These amendments aim to strengthen the financial reporting framework and expand regulatory coverage to include emerging digital assets and crypto-related financial accounts.
The amendments have been introduced through the Income-tax (Amendment) Rules, 2026, which primarily focus on expanding the scope of financial reporting to include crypto-assets, digital currencies, and electronic money. The revised provisions will be applicable from January 1, 2026.
As part of the amendment, important revisions have been made to Rule 114F, Rule 114G, and Rule 114H of the Income-tax Rules.
Amendments to Rule 114F
The notification brings notable modifications to Rule 114F, which lays down the framework for financial institutions to report details of foreign accounts under the Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS). These provisions require reporting entities to disclose information related to U.S. reportable accounts, including the requirement of self-certification by account holders. The amendment revises certain definitions within this rule to incorporate new forms of digital financial assets.
Changes to Rule 114G
Rule 114G deals with the reporting obligations of financial institutions regarding reportable accounts, including income such as interest, dividends, and other financial returns. Under the revised provisions, institutions must also disclose whether the account holder has submitted a valid self-certification. Additionally, if the account is jointly held, the report must mention that it is a joint account along with the number of joint holders.
These amendments aim to strengthen the financial reporting framework and expand regulatory coverage to include emerging digital assets and crypto-related financial accounts.
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