India Tightens Tax Rules for Crypto and Overseas Income
New Income Tax (I-T) rules, effective April 1, 2026, are set to increase scrutiny of cryptocurrency investments and income earned from abroad. The Central Board of Direct Taxes (CBDT) has released updated rules and forms reflecting these changes, signaling a firmer stance on tax compliance.
Increased Scrutiny of Crypto Income
The amended Income-tax Rules, 1962, specifically modify Rules 114F, 114G, and 114H under Sections 295 and 285BA of the Income-tax Act, 1961 . These revisions mandate detailed disclosure of transactions involving Virtual Digital Assets (VDAs), encompassing cryptocurrencies, non-fungible tokens (NFTs), and other digital tokens .
Crypto exchanges are now required to share transaction information with the tax department . This means undisclosed holdings or transactions will be flagged through the Annual Information Statement/ Taxpayer Information Summary (AIS/TIS).
Taxpayers must disclose each VDA transaction separately, including the date of acquisition, date of transfer, cost of acquisition, and resulting gain or loss. Aggregating multiple crypto trades into a single line item is no longer permitted .
New Requirements for Foreign Tax Credit Claims
Claiming foreign tax credit (FTC) will now require a Chartered Accountant’s (CA) certificate if the amount exceeds ₹1 lakh. Previously, documentary evidence alone was sufficient. Rule 76 of the new rules mandates CA verification (Form No. 44) for companies and individuals with foreign tax payments exceeding ₹1 lakh .
Changes to Tax Form Names
Several tax form names have been updated. Key changes include:
- Form 16A is now Form 131
- Forms 15G and 15H are now Form 121
- Form 26AS is now Form 168
- Form 16 is now Form 130
- Form 12BA is now Form 123
Taxpayers should request Form 130 from their employers instead of Form 16 .
The changes to the Income-tax Rules likewise cover the automatic exchange of financial account information .
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