Cryptocurrency Tax Measures Intensify: India Embraces OECD Regulatory Framework for Assets Held Offshore

The Indian government is set to enforce the Crypto-Asset Reporting Framework (CARF) starting from April 2027, marking a significant step in closing the gap in cross-border crypto taxation. This move mirrors an existing system already used to track hidden foreign bank accounts.

The CARF represents one of the strictest global efforts to monitor cross-border crypto activity. Once integrated, exchanges and service providers abroad will automatically share user data with Indian authorities, making offshore wallets, trades, and balances visible to Indian authorities. This global data-sharing network will also enable other tax authorities to automatically share data on cross-border crypto activity.

The CARF will cover crypto wallets, custodians, and centralized exchange accounts. Unreported gains from multiple years could lead to tax notices for crypto investors, as past offshore crypto holdings may be flagged once the CARF system is live, exposing undisclosed trades and assets.

For those who missed earlier years, India's ITR-U process allows updates to past filings. Investors who ignore compliance may find their historical transactions exposed once the CARF system is live. Waiting until 2027 to regularize crypto holdings could be costly, as hidden trades and offshore wallets will immediately appear in India's tax net.

By aligning with OECD rules, India ensures offshore holdings are treated the same as domestic accounts. Crypto investors are advised to begin regularizing their holdings by filing accurate reports through annual income tax returns.

It is important to note that there is no publicly available information about the countries with which India signed multilateral competency agreements in 2026 to implement the Crypto-Asset Reporting Framework. The countdown to 2027, when the CARF system will become active, has already begun.

This development was reported by Business Standard, underscoring the importance of this move for the Indian crypto market and the global crypto landscape. The CARF is a significant step in ensuring transparency and accountability in the crypto sector, and it is crucial for investors to stay informed and compliant.

Cryptocurrency Tax Measures Intensify: India Embraces OECD Regulatory Framework for Assets Held Offshore