India to implement OECD's crypto reporting framework from April 2027

India will implement the Organisation for Economic Co-operation and Development’s (OECD’s) Crypto-Asset Reporting Framework (CARF) from April 1, 2027, bringing offshore cryptocurrency holdings of its residents under the tax net, according to a senior finance ministry official. 

India is expected to sign the Multilateral Competent Authority Agreement (MCAA), a global framework for automatic exchange of tax information next year, he said. 

India had signed an MCAA for financial account information in 2015, but a separate pact under CARF will be required

to cover crypto assets, he clarified. Legislative changes and system preparations are already underway to meet the 2027 deadline, he said.

 

“Once CARF takes effect under the Automatic Exchange of Information, Indian tax authorities will begin receiving details of crypto assets held by residents in foreign exchanges and wallets. For instance, if an exchange is based in the UAE, it will report the data to the UAE tax authority, which in turn will share it with India under the multilateral framework. Residents will be liable to pay tax in India on such income as part of their total taxable income. But relief may be available under Double Taxation Avoidance Agreements where taxes have already been paid abroad,” the official added. 

An email sent to the finance ministry didn't elicit a response till the time of going to press. 

CARF will require crypto-asset service providers — exchanges, brokers, wallet operators, and non-fungible token (NFT) marketplaces — to report details of crypto-to-fiat conversions, crypto-to-crypto trades, transfers between platforms or wallets (including unhosted wallets), and high-value retail payments above $50,000. Stablecoins, crypto derivatives, and certain NFTs will also fall within the reporting net. 

According to Sanjay Sanghvi, partner at Khaitan & Co, taxpayers are already required to report foreign crypto holdings in ‘Schedule Foreign Assets’ and disclose their dealings in ‘Schedule Virtual Digital Assets’ of the income tax return forms. 

Failure to do so could attract not only tax demands but also penalties and prosecution under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. 

But this is based on self-declaration, and CARF will help plug the gap by providing Indian authorities with verified information from foreign jurisdictions, enabling cross-checks and enforcement. “Once Indian tax authorities start receiving details of crypto assets held abroad under CARF, taxpayers can expect notices requiring them to explain the source of funds and confirm whether gains have been disclosed in their returns,” said Sanghvi. 

International alignment on CARF is gaining momentum, with over 50 jurisdictions targeting exchanges by 2027 and more will follow in 2028. “This coordinated effort will enhance governments’ ability to identify potential risks and monitor offshore financial flows, including those related to crypto assets. The increasing adoption of the CARF is a positive development for the industry. It will help build trust and stability in the global financial system, while also strengthening efforts to curb tax evasion,” said Amit Rana, partner, PwC & Co LLP. 

According to Rohinton Sidhwa, partner at Deloitte, crypto markets tend to be highly volatile and speculative. The number of tokens has also expanded rapidly in recent years. “At the same time, traditional financial institutions and funds are trying to cash in on demand by offering products linked to crypto assets. Given its growing scale and risk profile, there is a pressing need to regulate crypto as a financial asset,” said Sidhwa. 

Industry estimates peg the Indian crypto market’s transaction values at around $172 billion, with the user base likely to cross 107 million by 2025.