Rule 242 makes a reporting crypto-asset service provider subject to reporting and due diligence in India if it is resident, incorporated, managed or has a regular place of business here, or acts through an Indian branch, with relief where the requirements are completed in a partner jurisdiction.
242
Rules 2026 · Rule 242
Obligation for reporting transaction of crypto-asset under section 509
Rules 201-260
Who is covered (sub-rules 1 and 2). A reporting crypto-asset service provider is subject to rule 243 (reporting) and rule 244 (due diligence) if it is an entity or individual resident for tax purposes in India; an entity incorporated or organised under the laws of India; an entity with legal personality in India or an obligation to file a return under section 263; an entity managed from India; or an entity or individual with a regular place of business in India. It is also subject for relevant transactions effected through a branch based in India.
Relief (sub-rule 3). It need not complete those requirements in India where an entity completes them in a partner jurisdiction by virtue of its residence, incorporation, legal personality or filing obligation, or management there; where an individual completes them in a partner jurisdiction because of tax residence there; where it has lodged a notification with India, in the format India specifies, confirming that it completes them under a partner jurisdiction's rules on a substantially similar nexus; or for transactions through a branch in a partner jurisdiction if that branch completes them.