The minister did not announce a date when the census would begin.
The once-in-a-decade population survey, originally due in 2021, has been delayed by the pandemic and technical and logistical hurdles.
The caste system, a rigid social stratification system that dates back thousands of years, is critical in Indian life and politics.
There are scores of caste-based political parties and many state institutions must offer quotas to lower castes for employment and college places.
Supporters have stressed the need for data on those deserving of government assistance while critics say caste has no place in a country with ambitions of becoming a major world power.
The announcement of the inclusion of caste details in the census comes months ahead of elections in the eastern state of Bihar.
Caste is a key political issue in the state, where an alliance of Prime Minister Narendra Modi's Bharatiya Janata Party will seek to retain power.
"Several states have conducted surveys to enumerate caste, some states have done this well, others have done this purely from a political angle, in a non-transparent way," Information Minister Ashwini Vaishnaw told a cabinet briefing.
Vaishnaw said including caste details in the census would ensure transparency in the process, rather than relying on individual surveys conducted by states.
India recorded its castes for the first time in 80 years in 2011 but the data was not made public as there were concerns about its accuracy.
Last year two southern states, Andhra Pradesh and Telangana, announced that they would undertake caste surveys while the northern state of Bihar released a caste census in 2022.
India's main opposition Congress party and its scion Rahul Gandhi have demanded a socio-economic caste census and said they would back a constitutional amendment to raise the 50 per cent cap on quotas for backward castes in government jobs and education.
"The aim of the caste census is not to just know about the count of various castes but their participation in the country's wealth as well," Gandhi said last year.
The current quotas are based on decades-old caste data and some analysts fear that new data could show a higher number of backward castes, leading to demands for raising the cap on quotas.
