- India‘s 2026-27 budget leaves the controversial 30% tax and 1% TDS on crypto unchanged, disappointing industry hopes for reform.
- A new penalty regime for 2026 introduces daily fines of ~$2.20 for non-filing and a fixed ~$545 charge for inaccurate crypto-asset reporting.
- The move tightens compliance around transaction disclosures but fails to address liquidity concerns that CoinSwitch co-founder Ashish Singhal says push activity offshore.
In India‘s Union Budget for 2026-27, unveiled this week, authorities opted to maintain the existing crypto tax structure while proposing stricter penalties for reporting failures. This decision leaves the high 30% levy on gains and the 1% tax deducted at source in place, much to the industry’s chagrin.
However, the government introduced a significant new compliance framework targeted at entities mandated to report crypto transactions. Consequently, from April 1, 2026, failures to submit required statements will incur a daily penalty of roughly $2.20.
A separate flat penalty of about $545 will apply for filing incorrect information or not rectifying flagged errors. The amendments, detailed in the Memorandum Explaining the Provisions in the Finance Bill, aim to strengthen enforcement and discourage incomplete disclosures.
Meanwhile, the refusal to alter the core tax regime has disappointed domestic crypto participants who had lobbied for relief. Market players argue the unchanged rules preserve frictions that dampen liquidity and incentivize moving trades offshore.
Ashish Singhal, co-founder of local exchange CoinSwitch, emphasized the challenges, stating, “The current tax framework presents challenges for retail participants by taxing transactions without recognising losses, creating friction rather than fairness.” He specifically advocated for a TDS reduction to 0.01% to improve market conditions.
Singhal added, “Raising the TDS threshold to ₹5 lakh would help protect small investors from disproportionate impact.” The government’s latest actions therefore sharpen reporting oversight without easing the broader tax burden that the industry contests.
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