Budget 2026 crypto penalties: what ₹200 a day means
Budget 2026 kept the 30% crypto tax and 1% TDS, and added ₹200-a-day and ₹50,000 fines for reporting failures. Who they apply to and what changes for you.
- Checked against the rules: Feb 2026
- Sources cited · No buy or sell calls
- Tax year 2025–26
The crypto industry went into the Union Budget for 2026–27 hoping for relief: a lower TDS, the right to set off losses, or a rate linked to income slabs. None of it happened. Instead, the Budget tightened compliance.
What stayed the same
- 30% tax on gains from transferring virtual digital assets, plus 4% cess.
- 1% TDS on transfers above the yearly threshold.
- No set-off or carry forward of crypto losses.
- No deductions apart from the cost of acquisition.
For the full rules, read our crypto tax guide.
What's new: penalties for reporting failures
The Budget introduced penalties linked to crypto-asset transaction reporting under Section 509 of the Income-tax Act, 2025, effective from 1 April 2026:
- ₹200 per day for failing to file the required statement, and
- ₹50,000 for filing an inaccurate statement, or not correcting errors.
These apply to the entities required to report crypto transactions, meaning exchanges and other platforms, not to individual taxpayers filing their own return.
Why it matters to investors anyway
The tax department already receives data on crypto trades through TDS filings. These penalties push platforms to report completely and correctly. In practice:
- your crypto activity is more likely to appear accurately in your Annual Information Statement (AIS),
- the department can more easily match what you report in Schedule VDA against platform data, and
- unreported gains are more likely to lead to a notice.
India has also committed to the OECD's Crypto-Asset Reporting Framework (CARF), under which countries share information about residents' crypto accounts on foreign platforms. Over time, offshore activity will become just as visible.
What you should do
- Download your AIS before filing and compare it with your exchange tax reports.
- Report every transfer in Schedule VDA, including swaps and loss-making trades. See the step-by-step guide.
- Claim all TDS so you don't overpay. See crypto TDS refunds.
- Disclose foreign holdings where required. See crypto on foreign exchanges.
What the industry wanted
Exchanges and tax firms had asked for TDS to be cut to 0.1% or lower, for losses to be set off, and for the 30% rate to be reviewed. Data shared ahead of the Budget suggested many TDS-paying users ended the year with net losses while still having tax deducted. The government chose not to act. Follow India's crypto regulation status for what could change next.
Sources
- Decrypt: No relief for crypto investors as India retains crypto tax in Budget 2026
- Business Today: Budget 2026 data flags misalignment in India's crypto tax rules
- TokenTax: Crypto tax in India
Frequently asked questions
Will I be fined ₹200 a day if I file my ITR late?
Not under these crypto provisions, which target reporting entities. Late ITRs have their own separate fees and interest.
Did the TDS rate change in Budget 2026?
No. It remains 1% on transfers above the threshold.
Does the new Income-tax Act change how crypto is taxed?
The rules carried over. Section numbers changed when the Income-tax Act, 2025 came into force on 1 April 2026.
Sources
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