On September 1, 2025, a senior finance ministry official announced India’s commitment to adopting the OECD’s Crypto-Asset Reporting Framework (CARF) by April 1, 2027, aiming to enhance tax transparency for cryptocurrencies. This follows India’s plan to sign the Multilateral Competent Authority Agreement (MCAA) in 2026, enabling automatic exchange of tax information on offshore crypto holdings. This move aligns with global efforts to combat tax evasion, as 67 jurisdictions, including India, pledged to implement CARF by 2027 or 2028.
The CARF, finalized by the OECD in June 2023, mandates Crypto-Asset Service Providers (CASPs) to collect and report user data, including tax identification numbers and transaction details, to domestic tax authorities for cross-border exchange. India’s existing tax framework, introduced in 2022, classifies cryptocurrencies as Virtual Digital Assets (VDAs) with a 30% capital gains tax and 1% transaction tax, yet lacks comprehensive regulation. As Finance Minister Nirmala Sitharaman stated, “Countries need to come up with a comprehensive plan as digital currencies are borderless,” emphasizing the need for global cooperation.
This adoption could bolster India’s 107 million crypto users by fostering trust through transparency, but challenges remain. The 2024 WazirX hack and a high-profile Bitcoin extortion case exposed regulatory gaps, pushing for stronger enforcement via the proposed COINS Act. By aligning with CARF, India aims to balance innovation with accountability, potentially attracting institutional investors while addressing tax evasion and illicit activities.
#CryptoTax
#IndiaCrypto
#CARF2027
#CoinVahini
#CryptoWorld
