In a significant move to curb tax evasion and enhance digital asset transparency, India will officially begin exchanging cross-border cryptocurrency transaction data starting April 1, 2027.
This initiative aligns India with the Crypto-Asset Reporting Framework (CARF), a global standard developed by the OECD. The framework mandates the automatic exchange of information between tax authorities to ensure that offshore crypto holdings and trades are reported back to a user’s home country.
1. The CARF Implementation Timeline
The transition to a global sharing system is a multi-year process involving legislative and technical preparations.
- Reporting Commences (April 2026): Starting April 1, 2026, Indian crypto exchanges, wallet providers, and intermediaries will be required to maintain and submit detailed records of user transactions to the Income Tax Department.
- First Global Exchange (April 2027): Data collected during the 2026-27 fiscal year will be shared with international partner jurisdictions starting in April 2027.
- Format Finalization: A senior Finance Ministry official confirmed that the detailed global information exchange format will be released before April 2026 to give exchanges time to prepare.
2. New Penalties for Non-Compliance
To ensure reporting discipline before the global exchange begins, the Union Budget 2026-27 introduced stiff penalties for exchanges and intermediaries under Section 509 of the Income Tax Act:
| Infraction | Penalty Amount | Effective Date |
| Failure to submit reports | ₹200 per day until compliance. | April 1, 2026 |
| Inaccurate reporting | ₹50,000 flat penalty per error. | April 1, 2026 |
| Failure to correct errors | ₹50,000 flat penalty. | April 1, 2026 |
3. Why This Matters for Investors
The primary goal of joining CARF is to eliminate “hiding places” for wealth in offshore accounts.
- Targeting Offshore Platforms: Indian authorities are particularly focused on users who moved their trading to foreign exchanges (like Binance or Bybit) to avoid the domestic 1% TDS. Under CARF, those offshore platforms will be obligated to report Indian residents’ activity back to the Indian government.
- Scope of Assets: The framework covers a wide range of digital assets, including stablecoins, NFTs, and tokenized securities.
- 30% Tax Reminder: Despite the new reporting rules, India’s core crypto tax remains unchanged: a 30% tax on all gains and a 1% TDS on all transactions.
4. Global Context: The 50+ Nation Pact
India is one of over 50 jurisdictions—including the UK, USA, and most EU member states—that have committed to the 2027 exchange deadline.
- MCAA Signature: India is expected to sign the Multilateral Competent Authority Agreement (MCAA) for crypto in 2026, which provides the legal “pipes” for the automatic data flow.
- Ending Anonymity: For the first time, crypto-assets will be treated with the same level of transparency as traditional bank accounts under the existing Common Reporting Standard (CRS).
Conclusion: Disclosure is No Longer Optional
The message from the 2026 Budget and the CARF commitment is clear: the era of “invisible” offshore crypto holdings is ending. By the time the first data exchange happens in April 2027, the Indian government will have a granular view of every significant crypto transaction made by its residents, regardless of where the exchange is located.
