Budget 2026 adds crypto penalties and reporting fines, reinforcing compliance over relief.
India’s Union Budget 2026 left crypto taxation unchanged, keeping the 30% levy and 1% TDS intact. Finance Minister Nirmala Sitharaman delivered the budget speech without mentioning digital assets. The decision preserved existing rules nationwide, despite sustained industry engagement seeking clarity, liquidity relief, and predictable compliance outcomes.
Crypto Taxation Absent From Budget 2026 Speech
As per The Economic Times, the budget speech avoided any reference to cryptocurrencies or virtual digital assets. As a result, Sections 115BBH and 194S of the Income Tax Act continue to apply. These provisions tax VDA gains at 30% and impose a 1% tax deducted at the source on transactions.
However, the framework still does not allow investors to offset losses or claim deductions beyond the original purchase cost. As a result, traders must pay tax on every profitable transaction, even if their total yearly result ends in a loss.
This structure remained in place despite earlier submissions and requests from India’s domestic crypto exchanges and tax reporting firms. Instead, the budget focused on tightening compliance measures rather than changing the tax structure itself.
Sitharaman also introduced new penalty provisions under Section 509 of the Income-tax Act, 2025. These penalties target cases where crypto-related statements are not filed or are filed inaccurately, and they take effect from April 1, 2026.
Liquidity Stress and TDS Mismatch
New information from FY 2024-25 showed gaps between trading outcomes and tax liabilities. As per KoinX’s crypto tax story 2025, 50.91 percent of investors reported net gains. However, 49.09 percent ended the year with net losses.
Despite near-even outcomes, taxable capital gains rose to ₹3,722 crore. Investors collectively recorded ₹1,178 crore in net losses. Still, they paid tax on ₹180 crore of gains due to the loss offset restriction.
Notably, ₹511.83 crore was collected as crypto TDS during the year. KoinX users contributed ₹130.16 crore, representing 25.43% of total collections. However, their final tax liability stood at ₹91.64 crore, leaving ₹38.52 crore potentially refundable.
Penalties Added as Buyback Rules Change Elsewhere
In contrast, the budget announced clear changes for equity markets. Sitharaman confirmed that share buybacks will now be taxed as capital gains for all shareholders. Corporate promoters will face a 22% tax, while non-corporate promoters will pay 30%.
However, crypto policy changes focused solely on enforcement. The proposed penalties include ₹200 per day for reporting delays. A ₹50,000 fine applies for inaccurate disclosures or failure to correct errors.
As Coingape reported, India’s FIU tightened crypto rules, mandating live selfies, geo-tagging and bank verification through test transactions. The measures apply to crypto exchanges and service providers to strengthen KYC and monitoring.
Industry executives acknowledged policy continuity. Edul Patel of Mudrex, Nischal Shetty of WazirX, and Raj Karkara of ZebPay referenced stability and compliance certainty. Ashish Singhal of CoinSwitch noted that penalties formalize reporting standards, according to company statements.
