According to a ChainCatcher report citing CoinDesk, India's federal budget for the 2026-27 fiscal year has retained the existing 30% tax on cryptocurrency gains and 1% withholding tax, disappointing industry groups that had previously sought tax reductions. Instead of adjusting the tax rates, the government proposed new penalties for entities that fail to properly report cryptocurrency transactions under Section 509 of the Income Tax Act starting from April 1, 2026. Entities that fail to submit the required reports will face a daily fine of 200 rupees (approximately $2.20) until the violation is resolved. Additionally, a fixed fine of 50,000 rupees (about $545) will be imposed for incorrect information or failure to correct errors after they are identified. Officials stated that the move aims to strengthen compliance, but market participants warned that it will continue to create friction for traders.
India's 2026 Budget Maintains 30% Crypto Tax and 1% TDS, Introduces Fines for Non-Compliance
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Summary
India's 2026-27 budget retains the 30% capital gains tax on cryptocurrency profits and the 1% TDS (Tax Deducted at Source), with no relief provided for traders. Under new rules under Section 509, entities will be fined 200 rupees per day for unreported transactions and 50,000 rupees for errors. Officials state that this move strengthens compliance, but critics warn it could harm liquidity and the broader cryptocurrency market.
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