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India will adopt the OECD’s Crypto-Asset Reporting Framework (CARF) to bring greater transparency to cryptocurrency transactions and tax offshore crypto holdings of Indian residents. The move, set to take effect by April 2027, will include signing a new Multilateral Competent Authority Agreement (MCAA) for automatic sharing of crypto tax information.
India, known for its high crypto taxation and lack of comprehensive regulations, is taking steps to align with global standards for crypto tax reporting. The new rules follow OECD guidelines and aim to bring overseas crypto assets held by Indian residents under the country’s tax net.
Global Standards Adoption
The Crypto-Asset Reporting Framework (CARF) was developed by the Organisation for Economic Co-operation and Development (OECD) to increase transparency in crypto transactions. CARF requires jurisdictions to automatically share tax data on crypto holdings, similar to the OECD’s prior bank account information frameworks.
To comply, India plans to sign a Multilateral Competent Authority Agreement (MCAA) in 2026, separate from the 2015 MCAA that covers traditional bank accounts. Legislative amendments are expected to ensure the framework is fully deployed before the April 2027 deadline.
Current Crypto Tax Regime
India already imposes a 30% flat tax on crypto gains, introduced in 2022, alongside a 1% tax deduction at source (TDS) on crypto transactions. Crypto exchanges must also pay an 18% service tax, which indirectly affects traders. Critics say these rules have pushed many crypto companies and traders offshore to tax-friendly jurisdictions like the UAE.
The government’s new reporting measures aim to capture offshore holdings, potentially increasing tax revenue but adding compliance burdens for traders and exchanges.
Regulatory Criticism
Stakeholders have long demanded clearer crypto regulations, but the government continues to focus on taxation rather than establishing a comprehensive regulatory framework. Analysts warn that targeting offshore crypto holdings may not resolve the underlying issues that encourage trading on foreign platforms.
Despite these concerns, the Indian government maintains that OECD-aligned reporting standards will strengthen transparency, improve tax compliance, and curb unreported crypto activity.
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