Budget 2026: FM Proposes ₹200 Per Day Penalty for Delay in Reporting Crypto-Asset Transactions [Read Finance Bill 2026]
Budget 2026 proposes a Rs. 200-per-day penalty for failure to report crypto-asset transactions within the prescribed timeline.
The Union Budget for the Financial Year 2026-27 was presented by Finance MinisterNirmala Sitharaman in the Lok Sabha today (Sunday, 1 February 2026).
The Finance Minister has proposed introducing a daily penalty of Rs. 200 for failure to report crypto-asset transactions within the prescribed timeline, as part of efforts to strengthen compliance and oversight in the virtual digital asset ecosystem.
The proposal forms part of the Finance Bill, 2026, which seeks to substitute Section 446 of the Income-tax Act. Under the revised provision, any person required to furnish a statement in respect of a crypto-asset transaction under Section 509(1) of the Income-tax Act who fails to do so within the prescribed time may be liable to a penalty of Rs. 200 for every day the default continues. The prescribed income-tax authority will impose the penalty.
For section 446 of the Income-tax Act, the following section shall be substituted, namely:—
“446. (1) If any person who is required to furnish a statement in respect of a transaction of a crypto-asset under section 509(1), fails to furnish such statement within the time prescribed under the said section, the prescribed income-tax authority under that section may impose on him, a penalty of ₹ 200 for every day for which such failure continues.
The move is aimed at tightening reporting requirements for crypto-asset transactions, which have been under increased scrutiny as the government seeks to improve transparency and curb tax evasion in the rapidly growing digital asset market. Reporting obligations typically apply to intermediaries and entities responsible for furnishing transaction details to the tax authorities.
India has gradually built a regulatory and tax framework for virtual digital assets in recent years, including taxation of income from crypto transactions and mandatory tax deduction at source. The proposed daily penalty adds another compliance layer, signalling a stricter enforcement approach towards non-reporting or delayed reporting.
The amendment will take effect from 1 April 2026 and will apply to the tax year 2026-27 and subsequent years.
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
