India Operationalizes CARF to Combat Cross-Border Tax Evasion
The Indian income-tax department has released new guidelines for crypto-asset service providers to comply with the I-T Act, 2025. The Central Board of Direct Taxes (CBDT) guidance note operationalizes the OECD's Crypto-Asset Reporting Framework (CARF), which enables automatic exchange of tax-relevant information on transactions in crypto-assets.
CARF is a dedicated global tax transparency framework that requires crypto exchanges to identify their users and report on specified transactions. The CBDT guidance note says the framework aims to ensure annualized reporting of tax-relevant information regarding specified crypto-asset activities.
Industry stakeholders have welcomed the new guidelines, saying they will make cross-border tax evasion more difficult. Edul Patel, CEO of Mudrex, said that standardizing reporting and sharing of transaction data will give tax authorities better tools to identify inconsistencies and improve compliance.