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Introduction Budget 2026 proposes an important compliance-side change for crypto-assets. The proposal does not create a new tax on cryptocurrency; rather, it strengthens the Government's information-reporting framework by introducing a separate penalty for failure to furnish, or for furnishing inac
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Budget 2026 introduces a new penalty framework under a substituted Section 446 for failure to furnish, or for furnishing inaccurate, crypto-transaction information, aiming to enhance compliance with Section 509.
The direct reporting obligation under Section 509 is placed on 'prescribed reporting entities,' such as exchanges, trading platforms, brokers, and other notified intermediaries.
A penalty of Rs 200 per day may be imposed for failure to furnish the required statement within the prescribed time. A penalty of Rs 50,000 may be imposed for furnishing inaccurate information that is not corrected, or for failing to comply with due-diligence requirements.
On its face, the amendment is not drafted as a direct filing obligation on every ordinary retail crypto trader. The obligation is on prescribed reporting entities, though individuals will be indirectly affected.
Stricter reporting by exchanges and intermediaries will lead to the government having more detailed and accurate information on individual crypto transactions, making under-reporting or mismatches easier to detect.
Individual traders should proactively reconcile their exchange-wise trade history, wallet records, TDS information (Form 26AS), and figures in Schedule VDA with data on the Income-tax portal to ensure full and correct disclosure.
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