India’s Budget Maintains Crypto Tax Rate and Introduces New Penalties
- The crypto tax regime remains unchanged, with a flat 30% tax on gains from crypto transactions.
- A new penalty framework will impose daily fines of ₹200 (approximately $2.20) for non-filing of reports related to crypto-asset transactions.
- A fixed penalty of ₹50,000 (around $545) will apply for inaccurate disclosures or failure to correct flagged errors.
- The provisions from the Finance Bill are set to take effect on April 1, 2026.
- Currently, there is a 1% tax deducted at source (TDS) on crypto trades, which industry experts argue hampers liquidity.
The Indian government aims to enhance compliance with these penalties while keeping the existing tax structure intact. The unchanged tax framework has disappointed many in the domestic crypto industry who sought relief after extensive lobbying efforts.
With penalties for non-compliance now in place, entities must navigate stricter reporting requirements alongside the ongoing tax obligations that continue to challenge market participants. (Source)
