From 1 April 2026. Section 285BAA, inserted by the Finance Act, 2025, requires a prescribed reporting entity in respect of a crypto-asset to furnish a statement of crypto-asset transactions, with registration and due diligence obligations prescribed by rules. Under the Income-tax Act, 2025 the same obligation is s.509, worked through rules 241 to 244 and Form 167; the first reporting period is calendar year 2026, with the first statements due in 2027.
The obligation itself is short. Section 285BAA(1) provides that 'Any person, being a reporting entity, as prescribed, in respect of a crypto-asset, shall furnish information in respect of a transaction of such crypto-asset in a statement, for such period, within such time, in such form and manner and to such income-tax authority, as prescribed.' Sub-section (2) lets the authority intimate a defect and give thirty days to correct it; sub-section (3) lets the authority call for a statement not furnished, again on thirty days; sub-section (4) requires the reporting entity, on discovering an inaccuracy, to inform the authority within ten days and furnish corrected information; and sub-section (5) empowers rules on registration of reporting entities, on the information to be maintained, and on due diligence to identify the user or owner of a crypto-asset. Sub-section (6) takes 'crypto-asset' from sub-clause (d) of s.2(47A). The department's own page records the section as effective from 1-4-2026.
Everything else is in the subordinate law, and it sits under the new Act. The equivalent provision in the Income-tax Act, 2025 is s.509, worked through rules 241 to 244 of the Income-tax Rules, 2026 and Form 167. Reporting is by a Reporting Crypto-Asset Service Provider — in practice an exchange or intermediary operating in India — and what goes into Form 167 is user identity, KYC details, tax residency and the reportable crypto transactions of the calendar year. The cycle is annual rather than real time. Reported commentary on the framework states that the first reporting period is calendar year 2026, with the first reports due in 2027, and that platforms will have to re-verify existing users' KYC and residency rather than applying the new due diligence only to new customers. The corpus holds separate entries for the amending notification and for the Board's guidance note to reporting providers.
This is a different feed from the one practitioners already deal with. Section 194S reporting is TDS reporting: it captures the trades on which 1% was deducted, plus, under rule 31A(4E), the amounts on which the guidelines required no deduction. Section 285BAA reporting is account reporting: who the user is, where he is resident, and what he transacted. It is the domestic leg of the OECD's Crypto-Asset Reporting Framework, which is what makes tax residency a reported field — a non-resident user's data is collected so that it can go to his own jurisdiction.
On penalties, commentary on the Budget 2026 changes describes a penalty of Rs 200 per day for failure to furnish the statement and up to Rs 50,000 for inaccurate or non-compliant reporting, under s.446 of the Income-tax Act, 2025 read with s.509(1). Those figures are from commentary, not from a statutory page fetched for this entry.
What it means for a taxpayer is not a new filing. It is that from the 2026 calendar year the department will hold, independently of your return and independently of the 1% deducted, a named record of what you transacted on Indian platforms. Schedule VDA has to reconcile to it in the same way the return already has to reconcile to the AIS, and the practical preparation is the same: keep the exchange statements, the wallet histories and the TDS certificates for the year, and confirm that the KYC and residency the exchange holds for you are correct, because that is what will be reported.
It converts crypto reporting from a transaction feed into an account feed, which is the same shift that made foreign bank accounts hard to leave out of a return. It also means the KYC and residency details sitting unchecked in an exchange account become tax data — a stale residency status or a mismatched PAN in the exchange's records will show up as a discrepancy the assessee has to explain.
The AO says crypto was not property at all before the 2022 amendments, so my gain cannot be a capital gain. Is there a High Court holding that crypto is property?
I borrowed money to buy crypto. Can I deduct the interest against my 115BBH income?
I sold Bitcoin in FY 2020-21, before the VDA regime — capital gains or income from other sources?
I trade crypto on an exchange. Who deducts the 1% under s.194S, on what amount, and what changes if a broker is in the chain?
I bought crypto directly from the seller, no exchange — do I deduct? And what if I paid in crypto rather than cash?
From which assessment year does the flat 30% charge on crypto actually begin, and has the Board itself said anything about set-off?
Do I have to list every crypto trade separately in Schedule VDA, or can I report the net gain?
Do I have to report my crypto holdings now, or does the exchange do it for me?
Every page in this library links to what it was written from, so you can check it rather than take our word for it.