Recently, India presented its Union Budget for the 2026-2027 fiscal year, with the 30% crypto taxes remaining untouched and penalties for failure in reporting crypto activities to authorities. Adding on, the government has planned to strengthen its crypto oversight by sharing cross-border crypto transaction data.
The move is part of the Indian government’s commitment to the OECD’s Crypto-Asset Reporting Framework (CARF). To note, all the crypto asset service providers (CASPs) in the country must report their transaction data to international tax authorities, and not directly to the Indian authorities.
In other words, tax authorities of different jurisdictions participate under CARF. As such, once a CASP reports the data, countries can exchange the relevant data between a user’s country of residence and the country where the trading platform is based.
Beginning from April 2027, all the CASPs must comply with the regulations and exchange data to enhance transparency and tax compliance. For those who are new to the industry, CARF is a global tax transparency rule by the Organization for Economic Co-operation and Development (OECD).
Indian officials have pointed out several reasons for participating in the CARF system. Like other jurisdictions, India is also concerned about the crypto activities that happen outside its regulatory boundaries. Many Indian residents are reportedly trading offshore, and the CARF rules will help domestic monitoring easier.
Moreover, if firms are registered under CARF, they cannot escape from tax evasions and illicit fund flows.
Several jurisdictions commits to exchange crypto transaction data
Earlier, several countries and jurisdictions have agreed to share crypto transaction data with cross-border tax authorities. Last year, the UAE signed an agreement with CARF to exchange data from 2028 onwards. Besides, countries under the European Union have officially committed to implement CARF beginning from 2027 or 2028.
According to the latest information by OECD, nearly 70 jurisdictions have so far committed to providing crypto transaction data to international tax authorities.
India’s Union Budget unfolds strict crypto oversight
The recent Union Budget has disturbed several crypto enthusiasts in the country. The crypto users and businesses must pay 30% tax on profits they earn from crypto trading, in addition to paying 1% tax deducted at source (TDS) on each transaction.
This has led to several users trading crypto on foreign crypto exchanges. As reported by Bitinning, a Bitcoin education platform, Indians have traded nearly ₹4.87 lakh crore on offshore exchanges.
However, for India, financial stability and security are quintessential aspects to take notice of, especially in times of illegal money flows and other related fraudulent activities. As such, the government is tightening its grip on crypto, as the identity of sender and receiver is anonymous on the blockchain.
