India’s Union Budget 2026 has kept the existing crypto tax framework unchanged, even as the government moved to tighten compliance through stricter penalties. While oversight has increased, industry leaders say the Budget missed a key opportunity to support long-term growth in crypto and Web3.
The Finance Bill introduces penalties to enforce reporting under Section 509 of the Income-tax Act, 2025. Union Finance Minister Nirmala Sitharaman said the aim is to deter non-compliance in crypto-asset reporting.
Under the amendment, entities that fail to file crypto transaction statements will face a ₹200 per day penalty, while furnishing incorrect or misleading information — or failing to correct it — will attract a ₹50,000 fine. These provisions will take effect from April 1, 2026.
“Tax Regime Remains Restrictive”
Reacting to the Budget, Sathvik Vishwanath, Co-founder and CEO of Unocoin, said expectations from Budget 2026 were much broader than enforcement alone.
“The Union Budget 2026 was expected to play a decisive role in shaping India’s approach to crypto assets and Web3 technologies,” he said in an interview with Coinpedia. “A primary expectation was the rationalisation of the existing tax regime for virtual digital assets, which is currently restrictive and misaligned with broader financial market practices.”
Sathvik added that allowing loss set-offs, reducing transaction-level friction, and aligning crypto taxation with other asset classes would have helped restore domestic liquidity and encourage compliant participation within India.
Regulatory Clarity Still Missing
Beyond taxes, Sathvik stressed that the lack of a clear regulatory framework continues to hurt Indian exchanges.
“The absence of a comprehensive, crypto-specific framework has created uncertainty for exchanges, investors, and technology developers,” he said. “Clear definitions, licensing norms, compliance standards, and consumer protection mechanisms are essential for long-term planning and responsible innovation.”
He warned that unclear rules have already reduced local trading volumes and pushed users to offshore platforms.
“A well-defined framework would help retain market activity within India, strengthen domestic exchanges, and improve regulatory oversight,” Sathvik said.
How India Compares Globally
Sathvik also opened up about how India lags behind global crypto hubs. He pointed out that Dubai has introduced purpose-built digital asset regulations, while Singapore follows a structured licensing and consumer protection model. The United States, despite earlier fragmentation, is gradually moving toward clearer asset classification.
“Compared to these jurisdictions, India’s current framework lacks the clarity and cohesiveness required to compete effectively for global capital, talent, and innovation,” he said.
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