Budget 2026: Govt introduces penalty framework for crypto trading entities

The framework includes Rs 50,000 fine for furnishing inaccurate information or failing to rectify inaccuracies

The Union Budget 2026 has introduced a stringent penalty framework for entities handling crypto-asset transactions, including Rs 50,000 fine for furnishing inaccurate information or failing to rectify inaccuracies.

 

Failure to submit the prescribed statement will attract a penalty of Rs 200 per day for the period the default continues.

 

Under amendments proposed in the Finance Bill, 2026, entities required to furnish statements on crypto-asset transactions under Section 509 of the Income-tax Act will face penalties for non-compliance. These provisions will come into effect from April 1.

 

The changes, detailed in the Memorandum Explaining the Provisions in the Finance Bill, amend Section 446 to “ensure compliance… and create a deterrence for non-furnishing of such statement or for sharing inaccurate information.”

 

 

The memorandum proposed penalties of Rs 200 per day for non-furnishing and Rs 50,000 for inaccurate particulars and failure to correct them.

 

Amit Maheshwari, partner with AKM Global, said that by amending Section 446, the government signals a stricter compliance environment for crypto-asset reporting, increasing accountability and encouraging timely, accurate disclosures. These measures, effective from April 1 are expected to enhance transparency in the crypto ecosystem and deter non-compliance.

 

"The Union Budget 2026 proposes strengthening compliance for crypto platforms over lapses in transaction disclosures, aiming to curb tax evasion in virtual digital assets. This requires exchanges to bolster compliance and accurate reporting of user transactions. We remain fully committed to working with policymakers to support the development of a safe, innovative, and globally competitive VDA ecosystem, as the regulatory landscape continues to evolve," said Sumit Gupta, co-founder CoinDCX.