India is set to plug a major gap in crypto taxation. The finance ministry has confirmed that the country will implement the OECD’s Crypto-Asset Reporting Framework (CARF) from April 1, 2027, which marks the start of FY 2027–28. Alongside this, India will sign a new Multilateral Competent Authority Agreement (MCAA) in 2026 to enable the automatic exchange of information on offshore crypto holdings and transactions of Indian residents.

This timeline aligns with the OECD’s global plan, which targets the first exchanges of crypto tax data in 2027 under CARF. India has been listed among countries preparing to make this commitment and is now putting a concrete framework in place.

What is CARF—and why does it matter?

The Crypto-Asset Reporting Framework (CARF) is the OECD’s global standard for the automatic exchange of tax-relevant information on crypto-assets. It was designed to close gaps left by the Common Reporting Standard (CRS), which already covers bank accounts and custodial financial assets but does not fully capture the crypto ecosystem.

Who must report?
CARF applies to Reporting Crypto-Asset Service Providers (CASPs)—a category that includes centralized exchanges, brokers, dealers, certain wallet providers, payment processors, and even some DeFi platforms that exercise control over interfaces.

What gets reported?

• User identity and tax details: name, address, tax identification number (TIN), tax residency, and date/place of birth (for individuals).
• Transaction data: crypto-to-fiat trades, crypto-to-crypto exchanges, transfers involving self-custody wallets, and merchant payment processing in crypto.
• Data is collected by service providers and submitted annually to local tax authorities, who then exchange it with partner countries.

India’s new regime from April 2027

Currently, India already taxes crypto through:

• 30% flat tax on gains from crypto and NFT transfers (Section 115BBH), with no deductions except cost of acquisition and no loss carry-forward.
• 1% TDS (Section 194S) on most crypto transfers, deducted at the point of transaction.

With CARF, India will extend its reach to offshore activity. Once the MCAA is signed, platforms in other participating countries will be required to collect and report data about Indian residents’ crypto activity—including trades and transfers—sending this information back to Indian authorities automatically.

This eliminates the ability of taxpayers to avoid reporting by simply shifting activity to foreign exchanges or wallets.

Timeline at a glance

• 2025: OECD sets global first exchange target for 2027. India signals intent and begins preparations.
• 2026: India expected to sign the CARF MCAA and put domestic reporting rules in place.
• April 1, 2027: Start of FY 2027–28; CARF comes into force in India. First reporting period begins.
• Late 2027: First actual data exchanges between India and other participating jurisdictions.

Who will feel the impact?

1. Indian investors with offshore accounts
They will face stricter KYC and reporting demands from foreign platforms. Their trades, payments, and even transfers to self-custody wallets (when processed through a CASP) will become reportable and visible to Indian authorities.

2. Crypto service providers
Both Indian and foreign exchanges serving Indian residents must build CARF-compliant systems, including KYC upgrades, transaction categorization, and annual reporting pipelines. Even some DeFi platforms may fall under scope if they control interfaces.

3. Indian tax administration
Authorities will gain access to detailed cross-border transaction data. This can be matched against self-reported income tax returns and TDS data to detect under-reporting or mismatches.

Practical checklist (2025–2027)

For investors:

• Keep accurate trade logs and cost-basis records.
• Ensure crypto gains declared in Income Tax Returns match TDS deductions.
• Be prepared to provide tax residency self-certifications and TINs to exchanges.

For exchanges and brokers:

• Align customer onboarding with CARF due-diligence rules.
• Upgrade systems to capture and report identity + transaction data in line with OECD schema.
• Prepare for secure data exchange once the MCAA is signed.

Big-picture implications

• Greater transparency: India will receive reliable data on offshore crypto holdings, reducing tax evasion opportunities.
• Level playing field: Offshore platforms lose the compliance advantage they held over domestic Indian exchanges.
• Institutional confidence: By aligning with OECD standards, India strengthens its global financial credibility, which may encourage more institutional crypto participation.
• Compliance friction: Investors can expect stricter onboarding, more KYC requests, and possible service restrictions if providers find compliance costs too high.

Bottom line

From April 2027, India will enter a new era of global crypto tax transparency. The adoption of CARF ensures that offshore crypto activity by Indian residents is no longer hidden from tax authorities. For investors, this means aligning their records with what will soon be automatically reported. For exchanges, it means upgrading compliance infrastructure to meet OECD standards.

This is not a change in tax rates—it is a change in visibility and enforcement. The 30% tax and 1% TDS rules stay in place, but with CARF, the scope of reporting becomes global, closing one of the last major gaps in India’s crypto tax net.