Income-tax Rules, 2026 | Rule 242 of 333

Rule 242 - Obligation for reporting crypto-asset transactions

Reviewed by CA Nikhil Gupta · Last reviewed 29 August 2026

Local extract available Legacy mapping: New

For the connected rule or filing step, see ITR for Crypto and VDA Transactions AY 2026-27.

242Rule number

1677Local text characters

0Linked Forms

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Source and status control

Primary authority: Notification No. 22/2026 / G.S.R. 198(E)

Currentness control: Base Rules effective 1 April 2026. Check later amendments, corrigenda and portal implementation before action.

Local statutory extract - official source controls

Rule text held in the production corpus

Obligation for reporting transaction of crypto-asset under section 509. 242. (1) A reporting crypto-asset service provider is subject to the reporting requirements under rule 243 and the due-diligence requirements under rule 244 if it is— (a) an entity or individual resident for tax purposes in India; (b) an entity incorporated or organised under the laws of India; (c) an entity that either has legal personality in India or is obliged to file a return of income under section 263; (d) an entity managed from India; or (e) an entity or individual with a regular place of business in India. (2) A reporting crypto-asset service provider is subject to those requirements in respect of relevant transactions effected through a branch based in India. (3) A reporting crypto-asset service provider is not required to complete these requirements in India where— (a) as an entity, it has already completed equivalent requirements in a partner jurisdiction by virtue of tax residence there (for sub-rule (1)(b)-(e)), incorporation or legal personality/tax-filing obligation there (for sub-rule (1)(d)-(e)), or being managed from there (for sub-rule (1)(e)); (b) as an individual, it has completed equivalent requirements in a partner jurisdiction by virtue of tax residence there (for sub-rule (1)(e)); (c) under any of sub-rule (1)(a)-(e), it has lodged a notification with India, in a specified format, confirming completion of equivalent requirements in a partner jurisdiction under a substantially similar nexus test; or (d) with respect to relevant transactions effected through a branch in a partner jurisdiction, that branch has completed the equivalent requirements there.

Local extract SHA-256: 0b6f1838449e13dfd0113b91200e9d24ff54ec770182802d79da84055a2853aa. This hash authenticates the local extract only; it does not certify that every amendment, table or Gazette footnote has been consolidated.

Rule map

Related sections

Use the title and official text to identify the governing section; no local section reference is asserted.

Related Forms

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Finin2min implementation framework

Trigger and scope

Determine whether the facts fall within the Rule heading and linked section. Verify commencement and the tax year involved.

Evidence and control

Preserve the return, statement, report, certificate, computation, source records and acknowledgement relevant to this Rule.

Consequence

Non-compliance may affect computation, exemption, deduction, procedural validity, reporting, recovery, appeal or penalty depending on the governing section.

Transaction application

Identify the actor, event date, governing tax year or reporting period, authority, document version and every cumulative condition. Record why each limb is satisfied, disputed or not applicable.

Authority, consent and execution

Confirm legal capacity, authorised signatory, digital-signature requirements, professional certification and portal credentials before filing or relying on the document.

Evidence and retention checklist

Retain source data, approvals, computations, correspondence, filing acknowledgement, payment record, amended filing history and the version of the governing instrument used.

Limitation, forum and remedies

Do not assume a general limitation period. Check the specific Act, Rule, notification, portal window, condonation power, appeal route and judicial treatment applicable to the event date.

Cross-law overlays

Check the Income-tax Act, 2025, transition rules, relevant Schedule, tax treaty, Companies Act, GST, FEMA and accounting treatment where the transaction crosses regimes.

Finin2min Q&A

Is this page the notified Rule?

It contains a local statutory extract, but the linked official source and later amendments control.

What should be verified immediately before use?

Effective date, amendment history, forms or utilities, filing channel, authentication method, due date, fees, transition from the 1962 Rules and any judicial interpretation.

Source and review trail

Use the current official instrument, portal or regulator publication before acting. This panel separates the category authority from page-specific references.

Official starting point: www.incometaxindia.gov.in

Page source links

Notification No. 22/2026 / G.S.R. 198(E)