Over 4,000 Reporting Financial Institutions (RFIs) in India are preparing for the next phase of international financial transparency: CRS 2.0. This update to the Common Reporting Standard, first implemented in 2015 under India’s adoption of the OECD Multilateral Competent Authority Agreement (MCAA), expands reporting obligations to include digital assets, tokenized holdings, and other emerging financial instruments. For banks, mutual funds, insurers, and asset managers, this is more than regulatory compliance; it is a strategic shift in how financial information is collected, validated, and shared across borders.
The stakes are real. Crypto and tokenized investments in India surged to over USD 4 billion in 2024, while penalties for non-compliance can reach ₹100,000 per unreported account. CRS 2.0 mandates a level of due diligence, reporting accuracy, and data governance that most institutions have never experienced. As January 1, 2026, approaches, the official effective date for many of these amendments, Indian financial institutions are racing to align systems, internal processes, and staff training to meet these new global standards.
Understanding CRS 2.0 and Its Significance
The Common Reporting Standard (CRS) was adopted by the OECD in 2014 to combat cross-border tax evasion through automatic exchange of financial account information. CRS 2.0, formalized in August 2022 and consolidated in June 2025, refines the framework to address modern financial instruments, particularly crypto-assets, electronic money, and central bank digital currencies (CBDCs).
For Indian RFIs, the implications are clear: all reportable accounts now require enhanced due diligence, including the identification of tax residency, validation of Tax Identification Numbers (TINs), and the monitoring of digital asset holdings. These changes are not optional. They reflect a global move toward transparent, auditable financial systems, where the accuracy of cross-border data is scrutinized by multiple jurisdictions simultaneously.
Who Must Report Under CRS 2.0 in India
CRS 2.0’s reach is comprehensive. Reporting Financial Institutions in India include:
- Depository Institutions, such as banks and cooperative banks that accept deposits.
- Custodial Institutions, including brokers, custodians, and depositories holding financial assets.
- Investment Entities, encompassing asset managers, mutual funds, and portfolio managers.
- Specified Insurance Companies, providing cash-value or investment-linked insurance products.
- Digital Asset Custodians, newly included under CRS 2.0, covering crypto and tokenized investment platforms.
Entity accounts require careful attention, particularly Passive Non-Financial Entities (NFEs), where controlling persons in reportable jurisdictions must be identified and documented. This includes trusts, foundations, and similar structures holding indirect financial exposures.
India’s Regulatory Framework for CRS 2.0
India’s journey with the Common Reporting Standard began with the signing of the OECD Multilateral Competent Authority Agreement (MCAA) in 2015. Since then, the Central Board of Direct Taxes (CBDT) has issued a series of guidance notes, circulars, and clarifications to help financial institutions navigate compliance. These measures ensure that India not only meets its global obligations but also provides practical steps for local institutions to implement CRS reporting efficiently.
At the core of India’s CRS compliance is Section 285BA of the Income-tax Act, 1961, which mandates the submission of the Statement of Reportable Accounts (Form 61B) by Reporting Financial Institutions. To operationalize this, CBDT has issued multiple Guidance Notes and clarifications:
2015–2016: The Central Board of Direct Taxes (CBDT) issued initial Guidance Notes on FATCA and CRS, including updates on 31 August 2015, 31 December 2015, 31 May 2016, and 30 November 2016. These documents provided Reporting Financial Institutions (RFIs) with procedures for due diligence, filing Form 61B, and identifying reportable accounts under Section 285BA of the Income Tax Act, 1961.
2020 & 2023: The CBDT released clarifications addressing reporting obligations for complex entity structures, preexisting and new accounts, and cases where client information such as U.S. TINs or foreign tax identifiers was missing. This ensured RFIs could comply with CRS 2.0 requirements while handling scenarios like dormant accounts, passive NFEs, and accounts exceeding reporting thresholds without full documentation.
4 May 2023: Through F. No. 500/107/2015-FT&TR-III, the CBDT clarified reporting for U.S. reportable accounts under FATCA, specifying TIN codes for situations where a U.S. TIN could not be obtained. The codes (222222222 to 999999999) cover scenarios such as preexisting accounts with only U.S. indicia as place of birth, new individual accounts with changed circumstances, dormant accounts, and accounts held by passive NFFEs. Reporting for the 2022 calendar year (due by 30 September 2023) was considered a transition year, with full compliance expected in subsequent years using the updated codes.
India also ensures cross-regulatory oversight: the RBI, SEBI, and IRDAI enforce CRS compliance among banks, brokers, insurers, and other intermediaries, emphasizing that non-compliance can trigger both financial penalties and reputational risks. Key regulatory clarifications include:
- Gratuity Funds, Armed Forces Non-Public Funds, and Treaty-Qualified Retirement Funds: CBDT guidance distinguishes how these entities are treated under CRS for reporting purposes, ensuring RFIs classify them correctly.
- TIN and Self-Certification Requirements: RFIs must report TINs where available, or apply specific codes in cases where TINs cannot be obtained, maintaining documentation of all efforts for regulatory review.
- Preexisting vs. New Accounts: Detailed processes define how accounts opened before CRS adoption differ in due diligence from accounts opened after, ensuring consistent reporting across account types and jurisdictions.
Through these measures, India provides a clear compliance roadmap for financial institutions, allowing them to navigate the complexities of CRS 2.0 while aligning with global standards. For Indian RFIs, integrating these regulatory requirements into internal systems, staff training, and client onboarding processes is critical for minimizing risk and maintaining international credibility.
Key Compliance Requirements in Practice
CRS 2.0 compliance in India relies on structured due diligence, reporting, and record-keeping, tailored to account type and status:
New Individual Accounts
At onboarding, RFIs must secure self-certifications confirming tax residency and, where applicable, TIN and date of birth. Any discrepancies between the self-certification and AML/KYC documents must be corrected immediately. For accounts with crypto or digital asset exposure, the certification must explicitly capture indirect holdings, ensuring full compliance with CRS 2.0’s expanded scope.
Preexisting Individual Accounts
Due diligence thresholds guide review efforts. Accounts under USD 1 million can often rely on residence address checks, whereas high-value accounts require enhanced monitoring, internal inquiries, and documentation of ongoing account activity. CRS 2.0 emphasizes that any change in circumstances, such as a client relocating abroad, triggers re-validation of tax residency.
Entity Accounts
All new entity accounts require verification of status and controlling persons. For preexisting accounts, thresholds guide when additional review is necessary. Passive NFEs demand special attention, with comprehensive identification of beneficiaries, trustees, or other controlling parties, particularly where indirect digital asset exposure exists.
The Importance of TIN Validation, Ongoing Due Diligence, and Advanced Compliance Tools
Accurate Tax Identification Number (TIN) reporting is central to CRS 2.0 compliance. Invalid or missing TINs can result in rejected filings, penalties, and challenges in cross-border information exchange. CRS 2.0 requires financial institutions to conduct “reasonableness” checks, verifying TIN syntax, structure, and authenticity across jurisdictions.
TaxDo offers an integrated solution that streamlines TIN verification and continuous account-holder due diligence, helping institutions maintain precise and auditable reporting.
TIN Verification Made Precise
- Official Global Real-Time TIN Lookup (GTL): Validates TINs directly against tax authority databases in over 130 countries.
- Global TIN Syntax Verification (GSV): Checks TIN format, structure, and checksum across 195+ jurisdictions, ensuring accuracy for both individual and entity accounts.
These tools can automate up to 90% of TIN validation workflows, reducing errors and operational overhead.
Ongoing Account-Holder Due Diligence
CRS 2.0 emphasizes continuous monitoring of accounts for changes in ownership, residency, or control. TaxDo’s Global Identity Intelligence Engine screens account holders against 290+ global watchlists, including sanctions, AML, and PEP databases, and flags accounts under RBI and CBI scrutiny. This ensures early detection of compliance risks and strengthens the reliability of reported data.
Comprehensive Compliance
By combining advanced TIN validation with global identity intelligence, TaxDo enables banks, financial institutions, and RFIs to meet all requirements under CRS 2.0 and CARF, maintaining full regulatory compliance with confidence and efficiency.
Challenges and Best Practices for Indian RFIs
Indian financial institutions face several pressing challenges with CRS 2.0. The inclusion of crypto and digital assets demands updated systems and vigilant monitoring, while changes in client residency or account structures require ongoing due diligence. Data silos and legacy processes further complicate compliance, making integrated reporting systems essential.
Best practices include automating TIN validation and self-certification checks, training staff to recognize complex account indicia, and conducting internal audits to preempt reporting gaps. Staying aligned with the June 2025 consolidated CRS 2.0 text and CBDT guidance ensures RFIs can meet deadlines while maintaining accuracy and regulatory credibility. Combining technology, expertise, and process rigor transforms CRS 2.0 compliance from a regulatory task into a strategic advantage.
Conclusion
CRS 2.0 goes beyond regulatory compliance to serve as a strategic framework that enhances transparency and accountability across financial institutions. For India’s RFIs, success lies in accurate data capture, robust TIN validation, and proactive due diligence. With the 2026 effective date approaching, institutions that align internal systems, update processes, and train personnel will not only avoid penalties but also reinforce their credibility in the global financial ecosystem.
Compliance under CRS 2.0 is achievable, but only through methodical preparation, continuous monitoring, and rigorous adherence to international standards. For banks and financial institutions, this is the moment to transform compliance from a regulatory burden into a strategic advantage.