Finance Bill – 2026:  Penalty for non-reporting of crypto transactions

 

Introduction:

1.  Effective 1 April 2026, India’s Finance Bill 2026 strengthens crypto-asset reporting by substituting Section 446 of the Income-tax Act, 2025, to impose strict penalties.

2.  Reporting entities obligated to share information under Section 509 face fines of ₹200/day for late filing and up to ₹50,000 for inaccurate disclosures, targeting improved tax compliance.

 

Key Aspects of the New Crypto Penalty Framework:

1.  Legal Basis: Section 509 remains the foundational provision requiring specified entities to furnish statements on crypto-asset transactions.

2.  Penalty Provision: Section 446 is substituted to introduce strict monetary penalties for non-compliance (late filing or inaccuracies) regarding this reported data.

3.  Penalty Amount: A penalty of ₹200 per day is proposed for failure to furnish the statement within the prescribed time.

4.  Inaccurate Information: A penalty of ₹50,000 is proposed for providing inaccurate information and failing to correct it, or for non-compliance with due diligence requirements.

5.  Effective Date: These changes take effect from April 1, 2026.

 

Conclusion:

These amendments aim to improve the accuracy of reporting and ensure accountability among entities handling virtual digital asset transactions