The Union Budget of India for the fiscal year 2026-27 has kept the country’s tax regulations on cryptocurrencies intact, maintaining the current transaction tax and withholding guidelines. However, it introduces a new penalty structure to enhance compliance regarding crypto-asset reporting.
According to the proposed changes in the Finance Bill for 2026, organizations obligated to report crypto-asset transactions to tax authorities will incur financial penalties for any violations. This includes daily fines for failing to file and fixed penalties for providing incorrect information.
These regulations are slated to commence on April 1, 2026.
The new rules target reporting entities as specified under Section 509 of the Income-tax Act, which requires the submission of detailed statements concerning crypto-asset transactions.
Entities that neglect to file the necessary statement will face a daily penalty of ₹200 — approximately $2.20 — for the duration of the non-compliance. Additionally, a one-time penalty of ₹50,000, or about $545, will be imposed for instances of inaccurate filings or for failing to correct identified mistakes.
These modifications are outlined in the Memorandum Explaining the Provisions of the Finance Bill and will be enacted via revisions to Section 446 of the Act.
The memorandum indicates that these measures aim to bolster compliance and deter inaccurate or incomplete reporting.