Budget 2026 proposes penalties to tighten crypto transaction reporting

New Delhi, Feb 1 (IANS) The Union Budget 2026–27 on Sunday proposed a new penalty framework to strengthen reporting compliance in the crypto ecosystem, sending a clear signal that transparency and accountability will be the government’s top priorities in the digital asset space. 

Presenting the Budget in Parliament, Finance Minister Nirmala Sitharaman said the government plans to introduce penalties for entities that fail to report crypto-asset transactions or provide inaccurate information.

The proposal is aimed at ensuring compliance with Section 509 of the Income-tax Act, 2025 and creating a deterrent against non-reporting and incorrect disclosures related to crypto assets.

Under the proposed rules, platforms and entities dealing in crypto assets will face a penalty of Rs 200 per day for failing to furnish prescribed transaction statements.

In cases where inaccurate particulars are provided and not corrected within the stipulated time, a fixed penalty of Rs 50,000 has been proposed.

Explaining the intent behind the move, the finance minister said the penalty provisions are meant to enforce reporting obligations and discourage non-compliance in the crypto sector.

The Finance Bill makes it clear that these penalties are directly linked to reporting requirements under the Income-tax Act, 2025.

The proposal comes at a time when crypto players were expecting some relief in terms of taxation and liquidity support from the Union Budget.

Instead, the government has taken a firm stand on compliance, indicating that regulatory discipline will come before any easing of the tax burden.

However, industry voices see the move as a step towards greater regulatory clarity rather than a purely punitive measure.

Many believe that stricter reporting norms could help bring crypto assets closer to India’s mainstream financial system by improving transparency and strengthening trust.

The new penalty provisions are proposed to come into effect from April 1, 2026.

Under the earlier framework, crypto exchanges and other reporting entities were required to submit statements of users’ crypto transactions to the Income-tax Department.

However, there was no specific penalty for delayed filings or for submitting incorrect or incomplete information.

--IANS

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