India’s Adoption of the OECD Crypto-Asset Reporting Framework: What It Means for Crypto Users

Starting April 1, 2027, India will begin automatically sharing data on crypto-asset holdings of its residents with tax authorities in other countries. This isn’t a future rumor - it’s official policy, announced by the Ministry of Finance in September 2024. The move is part of the OECD Crypto-Asset Reporting Framework (CARF), a global standard designed to close the door on offshore crypto tax evasion. For millions of Indian crypto users, this means a new level of transparency - and a lot more paperwork.

What Is the OECD Crypto-Asset Reporting Framework?

The OECD’s CARF is essentially the crypto version of the Common Reporting Standard (CRS), which India has used since 2015 to exchange bank account data with other countries. But instead of tracking bank balances and interest, CARF tracks cryptocurrency transactions - who owns what, where it’s held, and how much was bought, sold, or transferred.

It’s not optional. Over 67 countries, including all G20 members, have committed to implementing CARF by 2027-2028. India’s announcement during its G20 presidency made it clear: the country isn’t just following the rules - it’s helping shape them. The framework requires crypto exchanges, wallet providers, and even some decentralized finance platforms to report user data to India’s tax authorities, who will then share it with other participating countries.

When Does It Start - And What’s the Timeline?

The clock is ticking. Here’s the breakdown:

1. April 1, 2026: Section 285BAA of the Income Tax Act comes into force. This new law forces crypto service providers in India to start collecting detailed user data - names, addresses, crypto wallet IDs, transaction history, and asset values.
2. January 1, 2027: Reporting entities must begin submitting data in the standardized OECD XML format.
3. April 1, 2027: India officially starts exchanging this data with other CARF-participating countries.

That gives crypto platforms just over a year to upgrade their systems, train staff, and build automated reporting tools. The OECD published its XML reporting standards in October 2024, and India’s Finance Ministry is finalizing implementation guidelines expected in early 2025.

Who Has to Report?

It’s not just big exchanges like WazirX or CoinDCX. The law covers any entity that facilitates crypto transactions - including:

• Centralized crypto exchanges
• Crypto ATMs
• Wallet providers that hold keys on behalf of users
• Staking and lending platforms
• Decentralized finance (DeFi) platforms with centralized interfaces

Even if you’re using a foreign exchange, if you’re an Indian resident and that platform has a presence in India - or if it’s required to comply under local law - your data will be collected. The framework doesn’t care if your wallet is on Binance or a self-custody wallet. If you traded through an Indian-registered service, it’s reportable.

What Data Gets Shared?

It’s not just your balance. Here’s what tax authorities will see:

• Your full legal name and residential address
• Your tax identification number (PAN)
• Names and addresses of the crypto service provider
• Types of crypto-assets held (Bitcoin, Ethereum, stablecoins, etc.)
• Account balances at year-end
• Total gross proceeds from sales or exchanges
• Details of any transfers to or from non-resident accounts

This isn’t just about income tax. It’s about identifying unreported capital gains, hidden income, and offshore holdings. If you bought Bitcoin in 2021 and never declared it, CARF will make that visible to Indian tax officials - and possibly to authorities in the country where you moved the funds.

How Is This Different From India’s 30% Crypto Tax?

India introduced a flat 30% tax on crypto gains in 2022. But that relied on self-reporting - and many users didn’t report. CARF changes that. The 30% tax was a hammer. CARF is a spotlight.

Before CARF, the government had to chase down leads, audit returns, or rely on whistleblower tips. Now, it will get automated, standardized, and verified data from platforms every year. It’s like switching from manual bookkeeping to a live bank feed. If you sold ETH for INR and didn’t pay tax, the system will flag it - no need for an audit.

What Are the Challenges for Crypto Platforms?

Implementing CARF isn’t plug-and-play. Crypto transactions are complex. A single user might hold assets across 10 wallets, trade on three exchanges, stake on a DeFi protocol, and swap tokens on a DEX. Tracking all of that accurately requires:

• Integration with multiple blockchain APIs
• Real-time transaction monitoring
• Automated KYC and identity verification
• XML formatting compliant with OECD standards
• Staff trained in crypto-specific compliance

Smaller Indian exchanges may struggle with the cost. Some may outsource reporting to third-party compliance firms. Others might exit the market. Experts estimate that medium-sized platforms need 12-18 months to build compliant systems - meaning those who wait until late 2025 could be late to the game.

What About Privacy Concerns?

Some users worry this is surveillance. But CARF isn’t about tracking your every trade. It’s about reporting financial outcomes - not behavioral data. Your private keys? Not reported. Your wallet addresses? Only if they’re linked to a regulated platform. The framework doesn’t demand access to your hardware wallet or your MetaMask.

Think of it like a bank. Your bank doesn’t track what you buy with your debit card - but it does report your balance and interest to tax authorities. CARF works the same way. It’s about transparency, not intrusion.

How Will This Affect Indian Crypto Users?

For compliant users, CARF brings legitimacy. It signals that crypto isn’t a gray area anymore - it’s part of the formal financial system. That could attract institutional investors and reduce stigma.

For those who haven’t reported crypto income, the risk just went up dramatically. The Indian tax department already has a 30% tax rate and a 1% TDS on trades. CARF adds the ability to cross-check that data with global records. If you moved crypto to a foreign exchange to avoid tax, CARF will likely catch it.

And it’s not just India. If you’re an Indian resident with crypto on Binance (based in Malta), Kraken (US), or Coinbase (US), those platforms may be required to report your data to India - even if you never used an Indian service. CARF works both ways.

What’s the Global Context?

India isn’t acting alone. The U.S. is rolling out broker reporting rules. The EU has MiCA. Singapore, Australia, and Japan have their own systems. CARF unifies them all under one standard. That means:

• There’s no longer a “safe” country to hide crypto assets
• Regulatory arbitrage is dead
• Tax evasion across borders is getting harder

India’s large user base - over 100 million people - makes its participation critical. If India doesn’t implement CARF, the system loses power. But with India on board, the framework becomes truly global.

What Should You Do Now?

Don’t wait for April 2027. Start preparing now:

• Review your crypto transaction history from 2022 onward
• Ensure you’ve reported all gains on your income tax returns
• Keep records of purchase prices, dates, and wallet addresses
• If you use foreign exchanges, confirm whether they report to India
• Consider consulting a tax professional familiar with crypto reporting

There’s still time to get compliant. But once CARF goes live, the system will automatically flag discrepancies. The goal isn’t to punish - it’s to bring crypto into the light.