India Implements OECD's Crypto-Asset Reporting Framework, Targets Tax Evasion

The OECD's Crypto-Asset Reporting Framework (CARF) has been implemented in India through a guidance note issued by the Central Board of Direct Taxes (CBDT). The framework aims to facilitate the automatic exchange of information between participating jurisdictions, reducing opportunities for tax evasion.

Under CARF, crypto service providers will be responsible for identifying reportable users, collecting prescribed information, and submitting reports to the tax authorities. This includes verifying customer identity through Know Your Customer (KYC) procedures, determining tax residency, and collecting Taxpayer Identification Numbers (TINs), wherever applicable.

The CBDT has clarified that individual investors are not required to submit any new forms or disclosures solely because of the issuance of the guidance note. However, taxpayers must continue to accurately report crypto-related income in their income tax returns and maintain records of purchases and sales.