Sections 509 and 510 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 509 of the Income-tax Act, 2025 requires prescribed reporting entities to furnish information on transactions in crypto-assets, with rules for defects, missing statements and later corrections. Section 510 requires the income-tax authority to upload an annual information statement to the assessee's registered account. Matching that statement with your own records is the work of an AIS and TIS reconciliation.
This explanation is as per the Income-tax Act, 2025 (30 of 2025) as amended by the Finance Act, 2026. Under section 1(3) the Act came into force on the 1st April, 2026, save as otherwise provided. Later amendments, rules and notifications should be checked.
A reporting entity, as prescribed, must furnish a statement of crypto-asset transactions. A defect not rectified within thirty days (or any longer period allowed) makes the Act apply as if inaccurate information had been furnished; a missing statement can be called for by notice with up to thirty days to comply; and any inaccuracy found later must be reported within ten days. Under section 510 the authority uploads an annual information statement in the assessee's registered account, in the prescribed form, manner and time.
Section 509: crypto-asset transactions
Sub-section (1): the statement
Any person, being a reporting entity as may be prescribed, in respect of a crypto-asset, shall furnish information on a transaction of that crypto-asset in a statement. The period, time, form and manner, and the income-tax authority to whom it goes, are all as prescribed. Who is a "reporting entity" is not defined in section 509; it is left to the Income-tax Rules, 2026, and what has been prescribed is not in the text consulted.
Sub-section (2): defective statement
If the prescribed income-tax authority considers the statement defective, he may intimate the defect to the person who furnished it and give an opportunity to rectify it within thirty days of the intimation or such further period as may be allowed. If the defect is not rectified in that time, the provisions of the Act apply as if the person had furnished inaccurate information in the statement. The consequence of inaccurate information follows from the other provisions of the Act, which this section does not restate.
Sub-section (3): statement not furnished
Where a person required to furnish a statement has not done so within the specified time, the prescribed income-tax authority may serve a notice requiring him to furnish it within a period not exceeding thirty days from the date of service of the notice, and he shall furnish it within the time specified in the notice.
Sub-section (4): inaccuracy found later
If a person who has furnished a statement under sub-section (1), or in pursuance of a notice under sub-section (3), comes to know or discovers an inaccuracy in the information provided, he shall within ten days inform the prescribed income-tax authority of the inaccuracy and furnish the correct information in the prescribed manner.
Sub-section (5): rules
The Central Government may by rules prescribe: (a) the persons referred to in sub-section (1) to be registered with the prescribed income-tax authority; (b) the nature of information and the manner in which it shall be maintained by those persons; and (c) the due diligence to be carried out by them for identifying any crypto-asset user or owner.
Sub-section (6): meaning of crypto-asset
"Crypto-asset" has the meaning assigned to it in section 2(111)(d). This note does not restate that definition.
| Step | What the section says | Period |
|---|---|---|
| Statement | Reporting entity furnishes information on a crypto-asset transaction | As prescribed |
| Defect | Authority intimates; person rectifies | Thirty days from intimation, or such further period as may be allowed |
| Missing statement | Notice to furnish | Not exceeding thirty days from service |
| Inaccuracy discovered | Inform and furnish correct information | Within ten days |
Section 510: annual information statement
Sub-section (1): the upload
The prescribed income-tax authority, or a person authorised by that authority, shall upload in the registered account of the assessee an annual information statement. The form and manner, the time, and the information that goes into it are as prescribed. The statement is made up of information "in the possession of an income-tax authority".
Sub-section (2): registered account
"Registered account" means the electronic filing account registered by the assessee in the web portal, as designated by the prescribed income-tax authority or the person authorised by such authority.
Two points follow from the words of the section. First, the duty to prepare and upload the statement lies on the authority, not on the assessee. Second, the section does not say that the assessee must accept every entry, nor does it set out a procedure for disagreement; if the text is silent, that is where the matter rests, subject to the rules.
How the two sections connect
Information furnished by reporting entities under section 509 (and, for other transactions, under section 508) is the kind of information that an income-tax authority comes to hold. Section 510 does not say which sources feed the annual information statement; it refers only to information in the possession of an income-tax authority. For section 508, see our note on the statement of financial transaction.
A worked example (names and dates assumed)
Coinvale Exchange, a reporting entity prescribed for crypto-assets (assumed), furnishes its statement. (All facts are assumed.)
- The authority finds the statement defective and intimates the defect on 5 March. Coinvale has thirty days from the intimation, that is until 4 April, or such further period as may be allowed (section 509(2)).
- Coinvale does not rectify in time. The Act then applies as if it had furnished inaccurate information.
- Separately, on 20 April it discovers that one transaction was reported with a wrong detail. It must inform the authority and furnish the correct information within ten days, by 30 April (section 509(4)).
- For the assessee Mr. Kabir, whose account the exchange reported on, the authority uploads the annual information statement in his registered account on the web portal (section 510).
Need help reading your annual information statement?
If an entry in your statement looks wrong, or you want your return to match what has been reported, AIS and TIS reconciliation support can compare the statement with your records and suggest what to do next.
Key takeaways
- A prescribed reporting entity furnishes a statement of crypto-asset transactions (section 509(1)).
- A defect left unrectified within thirty days or the further period allowed leads to the Act applying as if inaccurate information had been furnished (section 509(2)).
- A notice for a missing statement allows up to thirty days (section 509(3)).
- An inaccuracy discovered later must be reported within ten days (section 509(4)).
- "Crypto-asset" takes its meaning from section 2(111)(d) (section 509(6)).
- The annual information statement is uploaded by the authority to the assessee's registered account (section 510).
Read next
- Section 508: statement of financial transaction or reportable account
- Section 511: report in respect of an international group
- Section 267: updated return
- Chapter XXIII guide: miscellaneous provisions
Disclaimer: Based on the Income-tax Act, 2025 (30 of 2025) as amended by the Finance Act, 2026, as consulted on 2 October 2026. It explains the words of the Act only; the Income-tax Rules, 2026, notifications, circulars, later amendments and the way the tax authorities and courts apply these provisions should be checked. This article is general information, not legal advice; check the official text before acting.