India will begin sharing and receiving cross-border cryptocurrency transaction data from April 1, 2027, under the Organisation for Economic Cooperation and Development (OECD) led Crypto-Asset Reporting Framework (CARF), according to a senior official. As reported by The Economic Times, the government has commenced work on the detailed sharing format, which will be finalized before April 2027. This move aligns India with the global standard that requires countries to automatically exchange information on crypto transactions between tax authorities, similar to existing frameworks for banking sector transactions. India is a signatory to the CARF, positioning the country to join a comprehensive global system for sharing crypto-related information. The technical setup for swapping this data is now being finalized, with the mechanism designed to mirror existing international systems used for banking and financial account information. Authorities highlighted that a substantial share of crypto trading by Indian users currently takes place on offshore platforms, which complicates oversight, but with CARF in place, India expects to receive regular, standardized updates on user activity abroad, improving its ability to detect tax evasion and unreported gains.
The Union Budget 2026 lays out a set of new crypto compliance rules for platforms, scheduled to take effect from April 1, 2026. Under the proposal, entities that fail to report transactions as required will face a daily penalty of ₹200, intended to deter ongoing non-compliance. In addition, a fixed penalty of ₹50,000 will apply to incorrect filings or failure to correct errors once identified. These penalties are aimed at strengthening reporting discipline ahead of India's participation in international information-sharing frameworks. The government is using the 2026-27 budget year to ensure domestic reporting is up to scratch, with the main goal being to get India's own reporting systems working properly before the international exchange kicks off. The preparation work involves adopting the CARF XML Schema, which requires platforms to gather detailed information including users' full names, addresses, tax identification numbers, and even transfers to unhosted wallets.
On January 8, 2026, the Financial Intelligence Unit (FIU-IND) revised its Anti-Money Laundering and KYC standards in conjunction with these statutory amendments. To combat the use of VPNs and false identities, these regulations go beyond simple ID verification. Under the updated requirements, platforms must now perform liveness detection, which means taking live video selfies when someone signs up. More importantly, they must also record the geolocation data (exact location coordinates) and IP addresses with timestamps for every new account. This guarantees that the data being prepared for the 2027 global exchange is checked properly from the start and significantly reduces the anonymity of cross-border transfers, bringing India in line with the latest standards from the Financial Action Task Force. Finance Minister Nirmala Sitharaman said the changes are meant to strengthen adherence to the Income-tax Act, 2025.
India has been pushing for coordinated global regulation of cryptocurrencies, arguing that cross-border oversight is critical as a large share of crypto trading by Indian users takes place on offshore platforms. As reported by The Economic Times, this initiative also aligns with recommendations of the Financial Action Task Force (FATF), aimed at curbing tax evasion and illicit financial flows. The objective is to ensure that India's reporting systems are robust and fully compliant before beginning international crypto transaction information exchange with other countries. The Centre will reach out to crypto exchanges to assist them with any technical issues related to the new information exchange requirements, with the government planning to apply severe penalties to make sure that cryptocurrency platforms and intermediaries adhere to the new reporting rules. The government plans to work closely with crypto exchanges and intermediaries to address technical, operational, and data management hurdles linked to the new obligations, with industry participants expected to take responsibility for system upgrades and internal controls needed to meet the stricter standards.
The government had previously introduced a 30% tax on gains and a 1% tax deducted at source from crypto transactions in 2022. According to The Economic Times, the Centre will reach out to crypto exchanges to assist them with any technical issues related to the new information exchange requirements. The government had in 2022 introduced a 30% tax on gains and a 1% tax deducted at source from crypto transactions, establishing a comprehensive tax framework for digital assets. These steps are designed to plug the "reporting gap" that has let transactions on overseas platforms stay hidden from tax collectors, with the "automatic" portion of the exchange depending on this technical alignment that enables tax authorities to identify discrepancies between a taxpayer's reported income and their actual global cryptocurrency activity. The overall regime now combines both fiscal and reporting requirements aimed at curbing opaque trading practices.