The Union Budget 2026 has proposed clear rules to improve compliance in crypto reporting. New penalties will apply to reporting entities, such as exchanges, if they fail to furnish crypto transaction statements or provide inaccurate information. From what is understood, these measures aim to ensure transparency and adherence to the Income-tax Act.
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Proposed Penalty Framework for Crypto Reporting
Under the Budget proposal:
- Non-furnishing of crypto transaction statements will attract a penalty of Rs. 200 per day.
- Furnishing inaccurate information, or failing to correct it, will attract a flat penalty of Rs. 50,000.
These penalties relate to Section 509 of the Income-tax Act, which mandates the submission of accurate crypto transaction statements, and Section 446, which is proposed to be amended to include these penalties.
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When Do Penalties Apply?
Penalties will be triggered if reporting entities:
- Don’t submit the required statements.
- Submit inaccurate statements and fail to correct them.
Effective Date
These provisions are expected to come into effect from April 1, 2026.
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Conclusion
The Union Budget 2026 clearly reinforces the need for accurate and timely crypto reporting, setting out defined penalties to discourage non-compliance. This guidance is anticipated to help exchanges and market participants plan their operations with confidence while aligning digital asset reporting with broader financial norms. Combined with earlier AML & CFT guidelines from the Financial Intelligence Unit-India, these measures seemingly signal a consistent approach that promotes accountability, builds trust, and supports the responsible growth of India’s crypto ecosystem.
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