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Union Budget 2026 Tightens Crypto Scrutiny with New Penalties, Leaves Tax Rates Unchanged
The Union Budget 2026, presented on February 1, 2026, provided no tax relief for India’s estimated 90 million crypto investors, maintaining the existing high tax rates while introducing new penalties for reporting non-compliance. Despite significant industry lobbying for a reduction in the 1% TDS and the ability to offset losses, Finance Minister Nirmala Sitharaman focused instead on tightening the regulatory net under the new Income Tax Act, 2025, which takes effect from April 1, 2026.
Key Crypto Tax Provisions for 2026
The core tax structure for Virtual Digital Assets (VDAs) remains unchanged from previous years:
30% Flat Tax: A flat tax of 30% (plus applicable surcharge and 4% cess) continues to apply to all profits from the transfer of VDAs, regardless of the holding period.
1% TDS: The 1% Tax Deducted at Source (TDS) on every transaction remains in place to track trades, a measure that the industry argues continues to drain market liquidity.
No Loss Set-off: Investors still cannot offset losses from one crypto asset against gains from another, nor can they carry forward losses to future years.
Limited Deductions: Only the cost of acquisition is allowed as a deduction; other expenses like mining or transaction fees are not deductible.
New Penalties for Reporting Entities
The Finance Bill 2026 introduced specific penalties for crypto exchanges and platforms (Reporting Entities) to ensure accurate transaction reporting:
Daily Penalty: A fine of ₹200 per day will be levied for failure to furnish required transaction statements.
Inaccuracy Fine: A fixed penalty of ₹50,000 will be imposed for providing inaccurate particulars in reporting statements.
Effective Date: These new penalty provisions under Section 509 of the Income Tax Act, 2025, come into force starting April 1, 2026.
Industry Reaction and Market Context
The industry has expressed disappointment, noting that while the government is formalising compliance, it is ignoring the "economic rationalisation" needed for growth.
Liquidity Migration: Experts warned that the lack of tax relief continues to push trading volumes to non-compliant offshore platforms, leaving domestic exchanges struggling for liquidity.
Investor Sentiment: Recent data showed nearly 49.09% of Indian crypto users reported net capital losses in the previous fiscal year, yet many still faced tax liabilities due to the inability to offset those losses.
Regulatory Direction: Stakeholders viewed the inclusion of penalties as a "positive milestone" for formalising the sector, but cautioned that true growth requires treating crypto more like traditional financial assets.
#unionbudget
#CryptoTaxIndia
#NirmalaSitharaman
#VDA
Key Crypto Tax Provisions for 2026
The core tax structure for Virtual Digital Assets (VDAs) remains unchanged from previous years:
30% Flat Tax: A flat tax of 30% (plus applicable surcharge and 4% cess) continues to apply to all profits from the transfer of VDAs, regardless of the holding period.
1% TDS: The 1% Tax Deducted at Source (TDS) on every transaction remains in place to track trades, a measure that the industry argues continues to drain market liquidity.
No Loss Set-off: Investors still cannot offset losses from one crypto asset against gains from another, nor can they carry forward losses to future years.
Limited Deductions: Only the cost of acquisition is allowed as a deduction; other expenses like mining or transaction fees are not deductible.
New Penalties for Reporting Entities
The Finance Bill 2026 introduced specific penalties for crypto exchanges and platforms (Reporting Entities) to ensure accurate transaction reporting:
Daily Penalty: A fine of ₹200 per day will be levied for failure to furnish required transaction statements.
Inaccuracy Fine: A fixed penalty of ₹50,000 will be imposed for providing inaccurate particulars in reporting statements.
Effective Date: These new penalty provisions under Section 509 of the Income Tax Act, 2025, come into force starting April 1, 2026.
Industry Reaction and Market Context
The industry has expressed disappointment, noting that while the government is formalising compliance, it is ignoring the "economic rationalisation" needed for growth.
Liquidity Migration: Experts warned that the lack of tax relief continues to push trading volumes to non-compliant offshore platforms, leaving domestic exchanges struggling for liquidity.
Investor Sentiment: Recent data showed nearly 49.09% of Indian crypto users reported net capital losses in the previous fiscal year, yet many still faced tax liabilities due to the inability to offset those losses.
Regulatory Direction: Stakeholders viewed the inclusion of penalties as a "positive milestone" for formalising the sector, but cautioned that true growth requires treating crypto more like traditional financial assets.
#unionbudget
#CryptoTaxIndia
#NirmalaSitharaman
#VDA
Budget 2024: Crypto industry bats for tax reductions, regulatory tightening of offshore exchanges
Letters sent out to the finance ministry last month by Bharat Web3 Association and CoinDCX highlighted concerns over the 30 percent VDA tax burdening small Web3 and crypto businesses and the need for a level playing field by bringing offshore exchanges under TDS regulations.This comes at a time when the Indian crypto sector has already started seeing some regulatory green shoots, with the finance ministry sending show-cause notices to offshore exchanges, which are not registered with the Financial Intelligence Unit-India (FIU-IND), and blocking their URLs.BWA’s current members include infrastructure providers such as Polygon and Biconomy; crypto exchanges such as CoinDCX and CoinSwitch; virtual gaming platform Hike; and other Web3 players such as Liminal and Tax Nodes.According to a note accessed by Moneycontrol, BWA’s asks include “reduction in the rate of TDS on transfer of VDAs (virtual digital assets) to 0.01% from 1%; specifically including foreign exchanges in the scope of TDS, and reexamining the flat rate of 30% applicable to income from the transfer of VDAs.”The note also said the existing taxation framework has “not achieved the intended purpose of enabling VDA transactions to be monitored.”—————🇮🇳JUST IN: Indian Finance Minister has announced that there will be no changes indirect or indirect taxes.Follow#Crypto scenario in India:Flat 30% TAX1% TDSNo set off for losses#CryptoTaxReform #indiaceyptotax #CryptoTaxIndia #indiaceyptotax #TrendingTopic
🇮🇳 Crypto Tax in India – Full Breakdown You Need to Know Before You Trade! 📉📈
Whether you're trading BOB, SHIB, BTC or PEPE — if you're in India, 💸 Uncle Income Tax is watching. Here’s everything you need to know in one simple post 👇
💰 1. Flat 30% Tax on Profits
----------------------------
📌 Applies only on profit when you sell crypto
📌 No deductions allowed (not even for gas, internet, or loss recovery)
📌 You calculate & pay this at the time of ITR filing
🔪 2. 1% TDS (Tax Deducted at Source)
----------------------------
📌 Charged on every crypto sale — profit or loss
📌 Must be paid at the time of sale
📌 Binance doesn’t auto-deduct this — you must deposit it manually if using Binance
🧾 3. Only Realized Profit is Taxed
----------------------------
📌 You are not taxed when holding
📌 Tax is triggered only when you sell crypto
📌 Withdrawals ≠ Profit unless the crypto sold had gain
😢 4. What About Losses?
----------------------------
📌 You cannot set off crypto losses against other income
📌 You cannot carry them forward
📌 Losses are just ignored by tax law (Section 115BBH)
🕵️♂️ 5. How Will ITR Know About My Crypto?
----------------------------
📌 They don’t — until you tell them
📌 But your bank withdrawals, TDS records, and UPI activity are tracked
📌 Mismatched filings can trigger notices or audits
💡 Pro Tip:
✅ Keep all trade records from Binance
✅ Use tracking tools like CoinTracker or Koinly
✅ File truthfully to avoid penalties 🚨
💬 Found this helpful?
Drop a 🧾 if you’re filing your first crypto tax return this year.
Share this to educate your Degen gang! 📤
#CryptoTaxIndia #BinanceSquare #CryptoProfits#TDS #CryptoEducation #TaxSeason2025 #BOBArmy #DYOR
Whether you're trading BOB, SHIB, BTC or PEPE — if you're in India, 💸 Uncle Income Tax is watching. Here’s everything you need to know in one simple post 👇
💰 1. Flat 30% Tax on Profits
----------------------------
📌 Applies only on profit when you sell crypto
📌 No deductions allowed (not even for gas, internet, or loss recovery)
📌 You calculate & pay this at the time of ITR filing
🔪 2. 1% TDS (Tax Deducted at Source)
----------------------------
📌 Charged on every crypto sale — profit or loss
📌 Must be paid at the time of sale
📌 Binance doesn’t auto-deduct this — you must deposit it manually if using Binance
🧾 3. Only Realized Profit is Taxed
----------------------------
📌 You are not taxed when holding
📌 Tax is triggered only when you sell crypto
📌 Withdrawals ≠ Profit unless the crypto sold had gain
😢 4. What About Losses?
----------------------------
📌 You cannot set off crypto losses against other income
📌 You cannot carry them forward
📌 Losses are just ignored by tax law (Section 115BBH)
🕵️♂️ 5. How Will ITR Know About My Crypto?
----------------------------
📌 They don’t — until you tell them
📌 But your bank withdrawals, TDS records, and UPI activity are tracked
📌 Mismatched filings can trigger notices or audits
💡 Pro Tip:
✅ Keep all trade records from Binance
✅ Use tracking tools like CoinTracker or Koinly
✅ File truthfully to avoid penalties 🚨
💬 Found this helpful?
Drop a 🧾 if you’re filing your first crypto tax return this year.
Share this to educate your Degen gang! 📤
#CryptoTaxIndia #BinanceSquare #CryptoProfits#TDS #CryptoEducation #TaxSeason2025 #BOBArmy #DYOR
🔥Crypto Tax in India: The Ultimate Guide to Stay Legal & Maximize Profits! 🇮🇳💰
Hey crypto fam! 🚀 If you’re trading $BOB, $SHIB , $BTC , or $PEPE in India, you must know the tax rules—or risk losing big to penalties. Don’t let taxes eat your gains! Here’s a simple breakdown to keep you safe (and profitable). 👇
---
💸 1. 30% Tax on Crypto Profits – No Escapes!
Only on profits when you sell (holding? No tax!).
No deductions—even if you lost money on other trades.
You pay this while filing ITR (no auto-deduction).
⚠️ Pro Tip: Track every sale—tools like CoinTracker/Koinly help!
---
🔪 2. 1% TDS – The Silent Profit Killer
Charged on EVERY sale (even at a loss!).
Binance won’t deduct it—you must pay manually.
Miss it? Tax notices will come knocking. 🚨
💰 Smart Move: Set aside 1% from every trade to avoid cash crunches.
---
😢 3. Losses? Tough Luck!
Can’t offset crypto losses against salary/stocks.
Can’t carry forward to next year.
Tax law just ignores them (Section 115BBH).
🤯 Reality Check: A bad trade hurts twice—loss + no tax relief!
---
🕵️♂️ 4. How Does the IT Department Track Crypto?
They don’t… until they do!
Bank withdrawals, UPI, TDS records = Red flags if undeclared.
Audit risk if your ITR doesn’t match transactions.
🔒 Safety Net: Keep ALL Binance trade history (screenshots/CSV).
---
🚀 5. How to Stay Safe & Keep More Money?
✅ Use tax tools (Koinly, CoinTracker) for auto-calculation.
✅ File on time—avoid last-minute chaos.
✅ Declare truthfully—penalties hurt more than taxes!
---
💬 Your Turn!
First time filing? Drop a 🧾 below!
Tag a friend who needs this!
Follow me for more tax hacks & crypto gems.
📢 Share this NOW—save your degen squad from tax traps!
#CryptoTaxIndia #BinanceSquare e #CryptoToRich #TaxHacks #CryptoIndia #BOBArmy #DYOR #PassiveIncome
---
💸 1. 30% Tax on Crypto Profits – No Escapes!
Only on profits when you sell (holding? No tax!).
No deductions—even if you lost money on other trades.
You pay this while filing ITR (no auto-deduction).
⚠️ Pro Tip: Track every sale—tools like CoinTracker/Koinly help!
---
🔪 2. 1% TDS – The Silent Profit Killer
Charged on EVERY sale (even at a loss!).
Binance won’t deduct it—you must pay manually.
Miss it? Tax notices will come knocking. 🚨
💰 Smart Move: Set aside 1% from every trade to avoid cash crunches.
---
😢 3. Losses? Tough Luck!
Can’t offset crypto losses against salary/stocks.
Can’t carry forward to next year.
Tax law just ignores them (Section 115BBH).
🤯 Reality Check: A bad trade hurts twice—loss + no tax relief!
---
🕵️♂️ 4. How Does the IT Department Track Crypto?
They don’t… until they do!
Bank withdrawals, UPI, TDS records = Red flags if undeclared.
Audit risk if your ITR doesn’t match transactions.
🔒 Safety Net: Keep ALL Binance trade history (screenshots/CSV).
---
🚀 5. How to Stay Safe & Keep More Money?
✅ Use tax tools (Koinly, CoinTracker) for auto-calculation.
✅ File on time—avoid last-minute chaos.
✅ Declare truthfully—penalties hurt more than taxes!
---
💬 Your Turn!
First time filing? Drop a 🧾 below!
Tag a friend who needs this!
Follow me for more tax hacks & crypto gems.
📢 Share this NOW—save your degen squad from tax traps!
#CryptoTaxIndia #BinanceSquare e #CryptoToRich #TaxHacks #CryptoIndia #BOBArmy #DYOR #PassiveIncome
🇮🇳 JUST IN: Indian Finance Minister has announced that there will be no changes in direct or indirect taxes.
#Crypto scenario in India: 🤨
1. Flat 30% #TAX
2. 1% TDS
3. No set off for losses
#Cryptotax #indiaceyptotax #cryptotaxindia
#Crypto scenario in India: 🤨
1. Flat 30% #TAX
2. 1% TDS
3. No set off for losses
#Cryptotax #indiaceyptotax #cryptotaxindia
🚨 Warning for Indian Crypto Holders! 70% Tax Penalty on Undisclosed Gains 🚨
If you are earning profits from cryptocurrency in India and not reporting it, you could be in serious trouble! The Indian tax department is tightening regulations, and undisclosed crypto income may face a penalty of up to 70%.
📌 Current Crypto Tax Rules in India:
✅ 30% Flat Tax: Any profit from cryptocurrency is subject to a 30% tax.
✅ 1% TDS: A 1% Tax Deducted at Source (TDS) is applied to every crypto transaction.
✅ Penalty: If crypto income is not disclosed, an additional penalty of 50% to 200% may be imposed.
✅ Legal Action: In severe cases, tax evasion could lead to imprisonment.
❗ Essential Steps for Crypto Investors:
🔹 Always report your crypto transactions correctly.
🔹 Stay updated with regulatory changes and maintain transparency.
🔹 Pay taxes on time to avoid hefty fines.
🔹 Keep records of all transactions and statements from crypto exchanges.
❓ Can the Government Track Crypto Traders?
Yes! The Indian government uses various methods to monitor crypto activities, including:
🔸 Tracking bank accounts and UPI payments
🔸 Collecting data from crypto exchanges
🔸 Blockchain surveillance
🚀 If you invest in crypto, follow regulations and avoid legal troubles!
#CryptoTaxIndia 🇮🇳 #CryptoRegulations #cryptotax #CryptoNews #CryptoAlert
$DOGE
$XRP
$ACT
If you are earning profits from cryptocurrency in India and not reporting it, you could be in serious trouble! The Indian tax department is tightening regulations, and undisclosed crypto income may face a penalty of up to 70%.
📌 Current Crypto Tax Rules in India:
✅ 30% Flat Tax: Any profit from cryptocurrency is subject to a 30% tax.
✅ 1% TDS: A 1% Tax Deducted at Source (TDS) is applied to every crypto transaction.
✅ Penalty: If crypto income is not disclosed, an additional penalty of 50% to 200% may be imposed.
✅ Legal Action: In severe cases, tax evasion could lead to imprisonment.
❗ Essential Steps for Crypto Investors:
🔹 Always report your crypto transactions correctly.
🔹 Stay updated with regulatory changes and maintain transparency.
🔹 Pay taxes on time to avoid hefty fines.
🔹 Keep records of all transactions and statements from crypto exchanges.
❓ Can the Government Track Crypto Traders?
Yes! The Indian government uses various methods to monitor crypto activities, including:
🔸 Tracking bank accounts and UPI payments
🔸 Collecting data from crypto exchanges
🔸 Blockchain surveillance
🚀 If you invest in crypto, follow regulations and avoid legal troubles!
#CryptoTaxIndia 🇮🇳 #CryptoRegulations #cryptotax #CryptoNews #CryptoAlert
$DOGE
$XRP
$ACT
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