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Budget 2026: Government Proposes Penalties for Inaccurate Reporting of Crypto Assets

Budget 2026: Government Proposes Penalties for Inaccurate Reporting of Crypto Assets

The Union Budget 2026 has added a penalty provision for both non-furnishing and inaccurate submission of crypto assets.

Written by Akash Dutta, Edited by Ketan Pratap | Updated: 2 February 2026 17:10 IST

Budget 2026: Government Proposes Penalties for Inaccurate Reporting of Crypto Assets

Photo Credit: Unsplash/Kanchanara

Budget 2026 proposes the penalties in adherence to Section 509 of the IT Act, 2025

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Highlights

Inaccurate reporting of crypto assets to attract a penalty of Rs. 50,000
Rs. 200 penalty per day for non-furnishing of crypto assets
ZebPay COO Raj Karkara said the Budget strengthens accountability

Union Budget 2026, presented in the Lower House of the Parliament on Sunday by Finance Minister Nirmala Sitharaman, proposes new provisions for reporting of crypto-related assets. The document proposes penalties for non-furnishing and furnishing inaccurate information in a statement on the transaction of crypto-assets. The proposed rule brings more accountability for digital assets and brings it closer to the country's financial standards. The proposed rules will take effect starting April 1. Crypto experts and market veterans have had a positive reaction to the proposed rules.

Budget 2026 Proposes Penalties for Inaccurate Information About Crypto Assets

In the official Union Budget 2026 document, the Government proposed new rules in Annexure Part B, Amendments relating to Direct Taxes. Under the section Rationalising Penalty and Prosecution's part (x), the document mentions, “Penalty provision for non-furnishing of statement or furnishing inaccurate information in a statement on transaction of crypto-assets.”

The Government proposed that it will levy a Rs. 200 penalty per day for non-furnishing of crypto assets. Additionally, if the submitted information is found to be inaccurate, the individual or the entity will face a penalty of Rs. 50,000. The document highlights that the provision is being made in adherence to Section 509 of the Income Tax Act, 2025, to create a deterrence for non-furnishing and inaccurate reporting of digital assets.

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Reacting to the new proposal, Raj Karkara, COO, ZebPay, said, “The Union Budget 2026 sends a clear and constructive signal for India's crypto ecosystem by reinforcing the importance of accurate and timely reporting of crypto-asset transactions. By introducing well-defined measures to address non-compliance, the Budget strengthens accountability while bringing digital asset reporting closer in line with established financial standards.” He added that this clarity will also enable exchanges and market participants to build frameworks in compliance with the financial system.

WazirX Founder Nischal Shetty also opined on the Budget 2026, and said, “The continuation of the one percent TDS and the restriction on loss set-off remain key friction points for users and the ecosystem. These measures continue to impact liquidity, participation and India's competitiveness in the global digital asset landscape. We remain hopeful that future policy discussions will address these concerns in a manner that balances innovation, compliance, growth and ease of doing business.”

SB Seker, Head of APAC at Binance said, "From a digital assets perspective, the Budget continues the existing taxation framework. At the same time, it highlights the need for a more forward-looking tax approach that evolves alongside market maturity, technological convergence, and India's broader digital ambitions."

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Further reading: Budget 2026, Cryptocurrency, Crypto, India

Akash Dutta Email Akash Dutta

Akash Dutta is a Chief Sub Editor at Gadgets 360. He is particularly interested in the social impact of technological developments and loves reading about emerging fields such as AI, metaverse, and fediverse. In his free time, he can be seen supporting his favourite football club - Chelsea, watching movies and anime, and sharing passionate opinions on food. More