India has revised its international tax reporting guidance to cover certain digital currencies, central bank digital currencies (CBDCs), and digital money products, while also generally tightening due diligence for financial institutions, according to a report on August 4 from the local outlet The Economic Times.
The move marks the country’s implementation of the Crypto-Asset Reporting Framework (CARF)—an international standard for tax reporting and information sharing—within India’s existing automatic exchange of information regime.
The revised guidance was reportedly issued by the Central Board of Direct Taxes (CBDT) and affects India’s Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standard (CRS) implementation rules.
The new guidance lays down a compliance framework for reporting financial institutions (RFIs), including banks, mutual funds, insurers, custodians, and other investment entities, on identifying reportable accounts, validating tax residency, and reporting financial information under the country’s Automatic Exchange of Information (AEOI) commitments.
It also introduces tighter due diligence obligations for reporting financial institutions. Specifically, institutions are required to apply enhanced due diligence to high-value accounts with balances exceeding $1 million, and this calls for additional review procedures before such accounts are classified for reporting.
Further, the framework provides updated procedures for validating tax residency and identifying reportable accounts across financial institutions covered by FATCA and CRS obligations.
While the guidance focuses on tax reporting requirements, it also places digital currency-related products alongside traditional financial assets that already fall under international information-sharing rules, bringing India’s reporting framework closer to the Organisation for Economic Co-operation and Development (OECD)’s CARF, a global tax transparency initiative designed to set a standard for tax reporting and improve the exchange of information between countries on digital asset transactions, to combat tax evasion and avoidance.
India was, until recently, one of five countries identified by the OECD—a global institution that promotes policies to improve world trade and economic progress—that had not yet committed to implementing CARF.
Countries getting in line with CARF
CARF was developed by the OECD between 2021 and 2022 and formally approved by the OECD Committee on Fiscal Affairs in August 2022.
The framework applies to so-called ‘Relevant Crypto-Asset Service Providers (RCASPs)’—including digital asset exchanges, wallet providers, brokers, and intermediaries—and requires them to carry out due diligence on users, collect self-certifications and tax residency details, identify reportable users across jurisdictions, and report digital asset transactions annually to tax authorities.
Each report must include the type of digital asset—such as stablecoins, NFTs, or tokenized assets—the value of the transaction, and the nature of the transaction, such as transfers or exchanges.
Once collected by a nation’s tax authority, this information can be exchanged freely with other countries that have also signed up to CARF to reduce tax evasion across global digital asset markets.
As of June 2026, the OECD said that 76 jurisdictions had committed to the rules, including “the vast majority” of digital asset centers. Forty-six jurisdictions are committed to undertaking their first exchanges by 2027, amongst them every Nordic and European Union nation (barring Cyprus), Japan, South Korea, Brazil, and the U.K.
The U.K. tax authority, for example, officially adopted the rules on January 1 of this year and is now in the process of collecting the data necessary to meet the 2027 exchange date.
The OECD cited India in June as one of five jurisdictions relevant to CARF that had not yet committed to implementing the framework. Since then, however, it has formally committed to CARF under the Global Forum’s commitment process and is expected to begin exchanges in 2027.
The revised guidance reportedly issued by the CBDT this week is one of the first significant domestic steps towards implementing that commitment.
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