The Crypto-Asset Reporting Framework (CARF) is a global tax transparency standard developed by the OECD at the G20’s request, and India has now adopted it domestically, building it into India’s Income-tax Act, 2025 and Income-tax Rules, 2026. Crypto platforms in India, including Mudrex, are reviewing what compliance with it will involve.
If you are wondering whether crypto trading is legal in India, is crypto legal in India, the short answer is yes: crypto trading is legal and regulated, though taxed differently from other assets. CARF doesn’t change that; it’s a separate, purely informational framework layered on top of the existing rules. Here’s a breakdown of what the Indian government has actually put in place.
The core idea
More than 50 countries have been involved in shaping CARF through the OECD Global Forum’s dedicated CARF Group, including India, alongside the existing global standard for regular financial accounts (CRS).
What India's Crypto Tax Reporting Rules Say in 2026
Being part of the CARF Group, which helped develop the framework, isn’t the same as having formally committed to implementing it internationally. Per the OECD’s own published tracker, a defined set of jurisdictions, mostly the ones shown above, have made that formal commitment. India is a notable case: it’s moving ahead with implementing CARF domestically from 2026 under its own Income-tax Rules.
The government’s rationale: crypto-assets have historically sat outside the reporting rules that apply to bank accounts and other financial assets. Because crypto can be held and moved without a traditional financial intermediary, it fell through a gap that CRS was never designed to cover. CARF is the government’s response to that gap, extending the same kind of tax transparency that already applies to banks and financial assets to crypto as well.
Who the framework applies to
The Rules define a category called Reporting Crypto-Asset Service Providers (RCASPs): broadly, any individual or entity that, as a business, provides services enabling crypto-to-fiat or crypto-to-crypto exchanges, such as Mudrex. This includes exchanges, brokers, and trading platforms. Whether a given platform is an RCASP under the government’s definition is something each platform, including Mudrex, is currently assessing.
Most crypto-assets fall within scope, with a few specific exclusions: central bank digital currencies, certain e-money products, and assets a platform has determined can’t be used for payment or investment.
What information the framework asks platforms to collect
Under the Rules, RCASPs would be required to collect a self-certification from users, a declaration similar in spirit to KYC, confirming:
Name and address
Country (or countries) of tax residence
Tax Identification Number (TIN), where applicable
Date and place of birth (for individuals) or incorporation (for entities)
This applies to the entire user base of a platform, not just a subset. The self-certification is how a platform determines which category a user falls into.
Who the reporting actually targets
This is the most important distinction in the framework: it’s designed to identify and report on users who are tax-resident outside India.
Users who are Indian tax residents still go through the same self-certification step, and their crypto activity remains fully subject to India’s existing domestic tax and reporting rules regardless. What CARF adds specifically is cross-border exchange: since there’s no other country to send their data to, it isn’t part of that international exchange. It’s also worth knowing CARF works both ways. Indian residents trading on foreign platforms would have their data reported back to India under the same framework, closing the loop rather than creating a gap.
Users who are NRIs, foreign nationals, or have tax residency in more than one country are the ones this cross-border exchange is specifically built to capture on Indian platforms. Reportable activity includes buying/selling crypto for fiat, crypto-to-crypto trades, and transfers to external wallets.
What happens to the reported information
Per the Rules, information on Reportable Users would be:
Filed by RCASPs with the Income Tax Department annually, by 31st May for the previous calendar year (via Form 167).
Automatically exchanged with the tax authority of the user’s country of tax residence, under international agreements.
Limited, by the Rules themselves, to use for tax administration purposes only.
How this relates to crypto tax in India
It’s worth separating two things that often get lumped together: crypto tax in India and CARF.
India already has its own domestic tax rules for crypto trading, a flat rate on gains and TDS on transactions, under separate provisions of the Income-tax Act. That’s the existing regime governing tax on crypto trading in India, and CARF doesn’t touch it. It doesn’t set rates, create a new tax, or change how cryptocurrency tax in India is calculated.
CARF is strictly about reporting: making sure information about crypto transactions gets shared with the right tax authority when a user is a resident in another country. Think of it as a parallel, information-sharing layer, not a change to the tax bill itself.
What the framework does not do
The government’s guidance is explicit on a few points worth highlighting, since new regulation often gets over-read:
It is not a new tax being levied. CARF is a reporting and information-exchange mechanism, not a tax on crypto gains or transactions.
It does not regulate or pass judgment on crypto transactions themselves. It assumes the existing legal position and works within it.
It’s not extra scrutiny aimed at crypto users. Banks, mutual funds, and other financial institutions have followed similar residency-reporting rules (CRS) for years. CARF simply brings crypto platforms into that same standard, rather than singling out crypto traders for special attention.
Where things stand
The framework has a compliance timeline set out by the government, with reporting periods starting from calendar year 2026 and the first filings due by 31st May 2027. Individual platforms are at different stages of assessing and implementing what this means for their own operations.
Don’t miss the deadline: report your crypto transactions
None of this changes the more immediate thing on most traders’ minds right now: the deadline to file your Income Tax Return is approaching, and crypto gains need to be reported just like any other taxable income. Missing the deadline can mean interest on unpaid tax, penalties, and a more complicated filing process down the line, so it’s worth sorting out sooner rather than later.
To make this easier, Mudrex has partnered with KoinX. Once you connect your Mudrex account with KoinX, either through the Mudrex app or directly on the KoinX website, it automatically pulls in your transaction history and helps you generate the reports you need.
Disclaimer: This article is for general informational purposes only and does not constitute tax or legal advice. It summarises a government framework based on the CBDT’s Guidance Note on Crypto-Asset Reporting Obligations; specific implementation details have not yet been finalised. For guidance specific to your situation, please consult a qualified tax advisor.
Siri is a writer venturing into the exciting realms of blockchain technology, cryptocurrency, and decentralized finance (DeFi), eager to explore the transformative potential of these innovations. She brings a unique perspective that bridges traditional industries and cutting-edge technology, often infused with a touch of humor through memes. She has a rich background in real estate and interior design, having previously contributed to NoBroker, where she crafted blogs and assets on these topics.
