Budget 2026: Strict Penalties for Non-Reporting Crypto Assets Under New Tax Law

• Budget 2026 introduces new penalty provisions for non-reporting of crypto assets under Section 509 of the Income Tax Act, 2025.
• Finance Minister Nirmala Sitharaman announced these measures to ensure compliance and deter inaccurate reporting of crypto transactions.
• A penalty of Rs 200 per day will be imposed for failure to furnish required statements on time.
• Providing inaccurate information in crypto asset transaction statements can lead to a penalty of Rs 50,000.
• These provisions, effective April 1, 2026, aim to formalize tax compliance for crypto exchanges and users, following identified undisclosed income from VDAs.

Why It Matters: Budget 2026 imposes significant penalties for non-compliance and inaccurate reporting of crypto assets.