Not reporting crypto transaction will lead to daily penalty of ₹200

The law presently criminalises the offence of failure to credit tax deducted at source to the account of the Central government
| Photo Credit: DULEZIDAR

The Union Budget proposes penalties for non-submission or inaccurate reporting of crypto asset transaction information.

A new penalty section will be introduced in the Income-tax Act, 2025 for failures related to crypto-asset reporting. Non-filing of transaction statements will incur a ₹200 daily fine, while submitting inaccurate information will attract a ₹50,000 penalty under Section 509 of the Act.

The Income Tax Department clarified these measures aim to ensure compliance among reporting entities regarding statement submissions and accuracy. The amendments are scheduled to take effect from April 1, 2026.

“By amending Section 446, the government signals a stricter compliance environment for crypto-asset reporting, increasing accountability and encouraging timely, accurate disclosures. These measures are expected to enhance transparency in the crypto ecosystem and deter non-compliance,” stated Amit Maheshwari, Managing Partner at AKM Global.

Neeraj Agarwala, Partner at Nangia & Co LLP, confirmed that income from Virtual Digital Assets (VDA) transfers remains taxed at 30% with no loss set-offs or expense deductions beyond acquisition costs.

Current law criminalizes failure to deposit TDS on specified transactions, including online gaming winnings and crypto asset transfers. The proposed amendment exempts transactions where winnings or considerations are entirely non-monetary from criminal liability.

“This acknowledges the practical difficulty in discharging tax obligations in non-cash transactions,” noted Agarwala.

Published on February 1, 2026