The Finance Minister of India, Nirmala Sitharaman, unveiled the Union Budget for the Financial Year 2026-27 on February 1, 2026, proposing a significant measure aimed at enhancing compliance in the cryptocurrency sector. A daily penalty of ₹200 is set to be imposed on individuals who fail to report their crypto-asset transactions within the specified timeline.
This initiative is part of the Finance Bill, 2026, which aims to amend Section 446 of the Income-tax Act. The new provision stipulates that any individual obligated to submit a statement concerning a crypto-asset transaction, as outlined in Section 509(1), will incur a penalty of ₹200 for each day of non-compliance.
The responsibility for enforcing these penalties will fall to the designated income-tax authority. The proposed amendment highlights the government”s ongoing effort to tighten reporting standards for crypto transactions, which have increasingly come under scrutiny to promote transparency and combat tax evasion in the burgeoning digital asset landscape.
Typically, these reporting duties are imposed on intermediaries and entities tasked with relaying transaction details to tax authorities. Over recent years, India has incrementally developed a regulatory framework for virtual digital assets, which includes the taxation of profits from crypto transactions along with mandatory tax deductions at source.
This newly introduced daily penalty represents an additional layer of compliance, signaling a tougher stance by authorities against late or non-reporting. The amendment is set to take effect on April 1, 2026, and will be applicable for the tax year 2026-27 and the following years.
