India has expanded its international tax reporting framework to include cryptocurrencies, central bank digital currencies (CBDCs) and other digital money products, strengthening its ability to exchange financial information with foreign tax authorities as digital assets become increasingly global.
The government has approved amendments to the Income-tax Rules, 1962, incorporating the OECD’s Crypto-Asset Reporting Framework (CARF) into India’s existing automatic exchange of information regime. The changes require reporting entities to collect, maintain and report information relating to specified crypto-asset transactions involving reportable users, allowing Indian authorities to exchange that information with participating jurisdictions.
The updated framework significantly expands the scope of assets covered by international tax reporting. In addition to cryptocurrencies such as Bitcoin and Ether, the rules encompass stablecoins, tokenized financial assets and certain digital representations of value transferred or stored using distributed ledger technology. They also include relevant information relating to central bank digital currencies where applicable under the framework.
The move brings India closer to a growing group of jurisdictions implementing CARF following its endorsement by the G20 and the Organisation for Economic Co-operation and Development (OECD) as the global standard for cross-border crypto tax transparency.
New Reporting Obligations for Service Providers
Under the amended rules, reporting crypto-asset service providers—including certain exchanges, brokers and other intermediaries—must conduct due diligence to identify reportable users and submit prescribed information to Indian tax authorities.
The reported data may include identifying information about customers, details of reportable crypto transactions and the value of transfers conducted during the reporting period. Tax authorities can then exchange the information with partner jurisdictions under existing international agreements, helping identify taxpayers who hold or transact in digital assets across borders.
The amendments are designed to address a longstanding gap in international tax reporting. While financial institutions have for years exchanged information under the Common Reporting Standard (CRS), many crypto assets fell outside that framework because transactions could occur without traditional banking intermediaries.
By extending reporting requirements to digital assets, India aims to reduce opportunities for offshore tax evasion while improving transparency in an increasingly digital financial system.
Global Push for Crypto Tax Transparency
India’s adoption of CARF reflects a broader international effort to modernize tax reporting as cryptocurrencies become more widely used.
More than 60 jurisdictions have committed to implementing the framework, with many planning to begin exchanging crypto-related tax information over the next few years. The OECD developed CARF in response to concerns that digital assets could undermine existing automatic exchange of information systems by allowing cross-border transfers outside the traditional banking sector.
The amendments do not create a new tax on cryptocurrencies. Instead, they strengthen reporting and information-sharing obligations, complementing India’s existing crypto tax regime, which includes a 30% tax on gains from virtual digital assets and a 1% tax deducted at source (TDS) on many transactions.
For cryptocurrency investors, the practical implication is that cross-border digital asset activity will become increasingly visible to tax authorities as participating countries begin exchanging information under the expanded framework.
As governments worldwide seek to close reporting gaps in digital finance, India’s decision to incorporate crypto assets, CBDCs and other digital money products into its international tax reporting rules signals that digital assets are becoming subject to the same transparency standards long applied to conventional financial accounts.