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Budget 2026: New Penalties for the Crypto Sector Explained
- Ripradaman R
- 2 days ago
- 2 min read
Introduction
Union Budget 2026 has introduced stricter compliance measures for the cryptocurrency sector.
The focus is on disclosure, reporting accuracy, and accountability under income-tax laws.
These changes aim to bring digital assets fully into the formal tax framework.
Key Budget 2026 Announcements on Crypto
Stricter Compliance Framework
The government has reinforced crypto reporting requirements under the Income-tax Act.
Virtual Digital Assets (VDAs) explicitly covered
Higher scrutiny on disclosures and filings
Alignment with global regulatory practices
New Penalties for Non-Disclosure
Failure to disclose crypto income now attracts direct penalties.
₹200 per day fine for non-reporting
Applies to income, holdings, and transactions
Penalties accumulate until compliance
Misreporting Attracts Higher Consequences
Incorrect or misleading disclosures are treated more seriously.
Classified under misreporting of income
Higher penalties compared to simple omission
Increased risk of assessments and audits
Who Is Most Impacted
The new rules affect a broad set of participants.
Active crypto traders
Investors holding VDAs on Indian or foreign exchanges
Individuals using wallets outside India
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What Remains Unchanged
Despite stricter penalties, core taxation rules stay the same.
30% tax on crypto gains continues
No set-off or carry-forward of losses
1% TDS on transactions remains applicable
Interesting Read:
Why the Government Is Tightening Rules
The intent is regulatory clarity, not prohibition.
Improve tax compliance
Track unreported offshore holdings
Reduce misuse of digital assets
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What Investors Should Do Now
Proactive compliance is critical.
Maintain detailed transaction records
Reconcile exchange statements regularly
Disclose all VDA income accurately
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Conclusion
Budget 2026 marks a decisive shift toward stricter crypto regulation in India.
Penalties now clearly outweigh the cost of non-compliance.
For crypto investors, transparency is no longer optional it is mandatory.
FAQ
Q1. What penalty is introduced for non-disclosure of crypto income?
A fine of ₹200 per day until the income is disclosed.
Q2. Does this apply to all crypto investors?
Yes, anyone holding or trading VDAs must comply.
Q3. Has the crypto tax rate changed in Budget 2026?
No, the 30% flat tax remains unchanged.
Q4. Are foreign exchange crypto holdings covered?
Yes, offshore holdings must also be disclosed.
Q5. Does misreporting attract higher penalties than non-disclosure?
Yes, misreporting can lead to more severe consequences.
Citations
Ministry of Finance, Government of India
Union Budget 2026 Documents
Income-tax Act, India
Central Board of Direct Taxes (CBDT)
Global Financial Regulation Reports
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