India to Share Cross-Border Crypto Transaction Data from April 2027

India is set to significantly strengthen oversight of cryptocurrency transactions by beginning the exchange of cross-border crypto transaction data from 1 April 2027. The move is part of a global effort to improve transparency in digital asset markets and curb tax evasion and illicit financial flows. According to media reports, India will join an international information-sharing mechanism being developed by global tax authorities, marking an important step in aligning the country’s crypto regulations with global standards.

Background: Growing Focus on Crypto Regulation

Cryptocurrency trading has grown rapidly in India over the past few years. A large share of this activity is carried out on overseas crypto platforms, which makes domestic monitoring difficult. Indian authorities have repeatedly raised concerns that such transactions can lead to tax evasion, money laundering, and unreported foreign income.

To address these risks, India has gradually tightened its regulatory framework. Earlier measures included a 30% tax on crypto gains and a 1% tax deducted at source (TDS) on crypto transactions introduced in 2022. The latest step focuses on international cooperation, recognising that crypto markets operate beyond national borders.

Global System India Will Join

India will exchange crypto transaction data under the Organisation for Economic Co-operation and Development (OECD)-led Crypto-Asset Reporting Framework (CARF). CARF is a global standard designed to enable automatic exchange of information on crypto assets between tax authorities, similar to existing systems used for banking and financial accounts.

India has already signed on to CARF and will start sharing and receiving data from April 2027. Officials have stated that the technical format for data exchange is currently being finalised and is expected to be released in the coming months.

Why Cross-Border Crypto Reporting Matters

The government has highlighted that a significant portion of crypto trading by Indian users happens on foreign exchanges, outside the direct reach of Indian regulators. This creates challenges in:

• Tracking taxable income
• Preventing illicit financial flows
• Enforcing compliance with domestic tax laws

By joining CARF, India will be able to access transaction data from other countries, making it easier to identify undisclosed crypto income and improve tax enforcement.

The move also aligns with recommendations from the Financial Action Task Force (FATF), which has called for stronger international cooperation to monitor digital assets and reduce financial crime risks.

Preparatory Steps by the Government

Officials have said that preparatory work is already underway to ensure a smooth transition to the global data-sharing system. The government plans to:

• Tighten reporting requirements for crypto platforms
• Strengthen supervision of exchanges and intermediaries operating in India
• Engage with industry stakeholders to address technical and operational challenges

These steps are intended to ensure that Indian systems are ready before cross-border data exchange begins in 2027.

Penalties Proposed in Union Budget 2026

The Union Budget 2026 has proposed strict penalties to enforce compliance with crypto reporting rules. From 1 April 2026:

• Failure to submit required crypto transaction statements will attract a daily penalty of ₹200.
• Incorrect reporting or failure to correct errors will lead to a flat penalty of ₹50,000.

Finance Minister Nirmala Sitharaman stated that these measures aim to strengthen compliance under the Income-tax Act, 2025, and discourage inaccurate or missing disclosures related to crypto assets.

Impact on the Crypto Industry

Industry players have noted that the proposed penalties, combined with existing taxes, signal tighter compliance expectations. While the measures may improve transparency, they could also:

• Increase operational and compliance costs for crypto exchanges
• Pose challenges for smaller domestic platforms
• Encourage consolidation in the crypto industry

At the same time, clearer rules may help improve regulatory certainty in the long term.