India has updated its FATCA and CRS Guidance Note to clarify reporting, due diligence and compliance obligations for Reporting Financial Institutions, including crypto exchanges and other intermediaries, while aligning the framework with OECD standards and introducing expanded reporting requirements through Form 166.
India’s Ministry of Finance has updated its Guidance Note on FATCA and CRS, providing detailed guidance for crypto exchanges and other intermediaries on their reporting obligations as Reporting Financial Institutions (RFIs) under section 508 of the Income Tax Act, 2025, and Rules 238 to 240 and Form 166 of the Income Tax Rules, 2026.
The updated Guidance Note, issued on 24 July 2026, aligns India’s reporting framework with internationally accepted Organisation for Economic Co-operation and Development (OECD) standards and expands guidance on reporting, due diligence and compliance requirements.
Reporting entities
The Guidance Note confirms that reporting obligations apply to entities classified as Reporting Financial Institutions (RFIs), including depository institutions, custodial institutions, investment entities and specified insurance companies. It also clarifies that crypto exchanges and other intermediaries falling within the definition of RFIs must comply with the reporting framework.
Financial and reportable accounts
The document explains the scope of financial accounts and reportable accounts, including depository accounts, custodial accounts, equity and debt interests, and specified insurance contracts. It also provides guidance on identifying Reportable Accounts, including those held by Reportable Persons and Passive NFEs with Reportable Controlling Persons.
The Guidance Note also identifies certain low-risk accounts that are excluded from review and reporting requirements.
Due diligence requirements
RFIs are required to apply due diligence procedures to distinguish between pre-existing and new accounts. The guidance requires self-certifications to establish tax residency and enhanced review procedures for certain high-value accounts. It also addresses situations where foreign indicia are identified and the documentation required to validate or cure such cases.
The Guidance Note includes detailed guidance on crypto assets covered and issues relating to fiscally transparent entities such as trusts and partnerships.
Reporting obligations
RFIs must maintain and report information through Form 166, which replaced Form 61B from April 2026. The required information includes the account holder’s name, address, Tax Identification Number (TIN), date of birth, account number and year-end balance.
The updated guidance also reflects recent CRS reporting changes requiring additional data, including joint account indicators, the number of joint account holders and the roles of Controlling Persons.
Compliance and enforcement
Annual reporting through Form 166 is due by 31 May following the relevant calendar year. The Directorate of Intelligence and Criminal Investigation (I&CI), together with sectoral regulators such as the RBI and SEBI, will continue to oversee compliance.
The Guidance Note states that penalties apply for furnishing inaccurate information, failing to furnish correct information or failing to comply with due diligence requirements. Under FATCA, significant non-compliance may result in an RFI being treated as a Non-Participating Financial Institution (NPFI), leading to a 30% withholding tax on certain US-source payments.
