Crypto assets: Penalty proposed in Budget 2026 on reporting entities for failure to publish information or incorrect details

Union Budget 2026: Tightening scrutiny over crypto transactions, the government plans to being in stricter norms for reporting by crypto platforms as well as a stiff penalty in case of non-compliance.

From April 1,2026 crypto exchanges and platforms will have to ensure timely sharing of statements of user transactions with the income tax department. From April 1,2026, the Finance Bill proposes to levy a Rs 200 per day fine on platforms if they fail to submit the required statement. The penalty will go up to Rs 50,000 if they provide incorrect details and do not correct them.

"Section 509 of the Act provide for obligation to furnish information on transaction of crypto-asset. As per the said section, prescribed reporting entity has the obligation to furnish information in respect of transactions in a crypto asset in a statement," said the Finance Bill 2026, which was tabled in Parliament on Sunday by Finance Minister Nirmala Sitharaman along with the Union Budget 2026-27.  

To ensure compliance to the provisions of section 509 of the Act and create a deterrence for non-furnishing of such statement or for sharing inaccurate information in such statement, it is proposed to introduce penalty provision, it further said.

Amit Maheshwari, Managing Partner, AKM Global, a tax and consulting firm explained that the change puts clear consequences for both not reporting and misreporting crypto transactions. "It is meant to improve transparency and compliance in the crypto space, while also bringing crypto reporting rules in line with those already applicable to other financial intermediaries," he said.

Earlier, crypto exchanges and other platforms were required file a statement sharing details of users’ crypto transactions with the Income-tax Department, but there was no specific penalty if they did not file these reports on time or gave wrong or incomplete information. "This made enforcement weak and allowed gaps in reporting, even as the government expressed concern over growing crypto activity and under-reporting of income," he further said.

The Finance Bill, 2026 fixes this gap by clearly spelling out penalties. 

Meyyappan Nagappan, Partner- Tax Practice, Trilegal also noted that the Finance Bill 2026 introduces a new penalty regime under the Income‑tax Act, 2025 for failures in reporting crypto‑asset transactions including a daily penalty for non‑filing and a fixed penalty for inaccurate statements. "While there was a reporting obligation introduced under the Income-tax Act, 1961, no similar VDA‑specific penalty existed therein, making it a significant compliance development," he explained.