India integrates crypto-assets into tax reporting and pilots bond tokenization

India is advancing its digital financial regulatory framework through new tax reporting guidelines and a pilot program for corporate bond tokenization.

The Central Board of Direct Taxes has revised international tax reporting guidance to include certain digital currencies, central bank digital currencies (CBDCs), and digital money products. This move implements the Crypto-Asset Reporting Framework (CARF) within India’s existing automatic exchange of information regime. The updated rules require financial institutions—including banks, insurers, and mutual funds—to apply enhanced due diligence to high-value accounts exceeding $1 million and provide updated procedures for validating tax residency.

Simultaneously, the Securities and Exchange Board of India (SEBI) is moving forward with a pilot to test tokenized corporate bonds using distributed ledger technology. The project aims to settle these bonds through the Reserve Bank of India’s wholesale CBDC rails. The pilot will explore automated debt servicing, smart-contract functions, and faster settlement processes to improve efficiency in India’s corporate bond market, which has approximately Rs. 59 lakh crore in outstanding debt.