Income Tax Rules 2026: CBDT Introduces Major Updates to include crypto-assets

The Central Board of Direct Taxes (CBDT) under the Ministry of Finance has issued a notification (G.S.R. 158(E) dated 5th March, 2026), introducing the changes made to the Income Tax Rules, 1961. These changes are made by the central government under section 295 read with section 285BA of the Income Tax Act, 1961 (43 of 1961).

The new rules are known as Income-tax (Amendment) Rules, 2026. The changes are mainly related to digital currencies, crypto-assets, and electronic money and are effective from January 1, 2026.

The major changes are made to Rule 114F, Rule 114G and Rule 114H.

Rule 114F Changes

The notification mainly brings changes to Rule 114F of the income tax rules, which outlines the framework for the financial institutions to report information on foreign accounts under FATCA (Foreign Account Tax Compliance Act) and CRS (Common Reporting Standard). This rule mandates reporting on US reportable accounts, including self-certification. The new amendments revise some definitions under this rule.

Changes in Rule 114G

Rule 114G outlines the reporting requirements for financial institutions regarding the reportable account, including interest, dividends, and other income. As per the new amendment, the institutions must also report whether the account holder has provided a valid self-certification and whether the account is a joint account, including the number of joint account holders.

Changes to Rule 114H

Rule 114H of the Income Tax Rules requires the strict due diligence process for financial institutions to identify and report foreign tax residency accounts.

Non-U.S. account holders’ banks must use similar anti-money laundering steps to identify controllers, even if not legally required under PMLA 2002.

Refer to the official notification for more information.