India has announced its Union Budget 2026, ignoring calls for reform from industry experts to stick to its existing tax framework. According to the details shared by Finance Minister Nirmala Sitharaman, the country did not deem it fit to make any revisions concerning taxes from crypto transactions. Since the beginning of the year, there have been numerous calls by participants in the crypto industry in India for a review of the current crypto tax framework. According to most people, the Budget 2026 provided an opportunity for the country to carry out a tax reform that would encourage local and international participation. At the time, industry experts expected the budget to focus on simplification and clarity as the crypto market matures. However, the country has chosen to stick with the current framework. India retains existing crypto framework despite calls for reform During the highly anticipated announcement, the Finance Minister did not announce any revisions to the 1% TDS (tax deducted at source) on crypto transactions or the restrictions on offsetting losses. According to industry experts, these policies have long since posed challenges to investors and traders in the country’s crypto sector. Edu Patel, CEO of Mudrex, said the decision to maintain the tax framework shows continuity. The CEO noted that the industry was expecting reforms that would improve market participation and onshore liquidity. Patel also said that while the sector has been growing despite the regulatory and tax challenges, a reform of transaction taxes and enabling loss offsets would have strengthened the country’s competitive edge in the global digital asset economy. However, he mentioned that he is confident that continued dialogue between policymakers and the industry will help shape the framework in the future. Nischal Shetty, founder of WazirX , also shared a similar thought. Shetty noted that sticking to the existing framework means traders and investors are still faced with challenges in the crypto market. He noted that the decision means that aspects like liquidity, participation, and competitiveness on the global stage would be greatly affected. Like Patel, Shetty remains hopeful that dialogue with the right authorities would address all these issues when the time comes. Industry experts hail penalties for compliance In her Budget 2026, the Indian Finance Minister said that to ensure that traders comply with the provisions of Section 509 of the Income Tax Act, and create deterrence for non-reporting of statements or for reporting inaccurate information with respect to crypto assets, she is introducing a penalty provision. Under this provision, it will introduce a penalty of Rs. 200 per day for non-reporting of statements and Rs. 50,000 for reporting inaccurate statements and failure to correct the statement. The minister noted that the new amendment will take effect from April 1, 2026. Ashish Singhal, co-founder of CoinSwitch, mentioned that the introduction of specific penalties for not reporting crypto transactions is a right step for the crypto industry. He said that by mandating and enforcing the penalties for not reporting transactions and inaccurate reporting for tax purposes, the government has formalized a new standard of tax compliance and reporting for both users and crypto exchange platforms. While compliance and surveillance have grown, Singhal added that true growth requires economic moves that would keep Web3 companies and talents within India. The Income Tax Act contains provisions under Sections 115BBH and 194S, which govern the taxation of Virtual Digital Assets (VDAs) like crypto, NFTs, and other tokens in India. VDA gains will continue to be taxed at a flat rate of 30%, while 1% will be deducted at source on every transaction. In addition, non-trading income will also be taxed as per the individual’s income slab. Join a premium crypto trading community free for 30 days - normally $100/mo.
