The unchanged policy means investors continue facing restrictions that prohibit offsetting losses from price drops or security breaches against other income, while the 1% TDS on every transaction makes thin-margin trading strategies commercially unviable on Indian platforms.
The Indian government's stance "signals that they are still choosing to wait and watch before they decide on next steps," Pranav Agarwal, independent director at Jetking Infotrain India—the country's first listed Bitcoin treasury company, told Decrypt.
CA Sonu Jain, chief risk and compliance officer at 9Point Capital, told Decrypt the expectation of unchanged crypto taxes stemmed from the government's current priorities, which focus "not on revisiting crypto tax policy but on strengthening enforcement, reporting, and compliance."
India is coordinating policy discussions “at the G20 level on a comprehensive regulatory framework for crypto assets,” Jain said, adding that any revisions to tax rules are likely only once “such regulations are in place.”
While tax rates remain untouched, Budget 2026 did ease one enforcement provision.
Criminal liability for TDS defaults, previously punishable with up to seven years’ imprisonment, has been reduced to a maximum of two years, with courts now allowed to convert violations into monetary penalties.
Jain called the move “a big positive for P2P traders who have been non-compliant.”
New reporting penaltiesHowever, the budget introduced new penalty provisions for non-compliance with crypto asset transaction reporting requirements under Section 509 of the Income Tax Act, 2025.
Entities failing to furnish statements face a penalty of $2.19 (₹200) per day, while those providing inaccurate information or failing to correct inaccuracies will be penalized $546 (₹50,000), taking effect from the 1st of April.
"Taxation was introduced as an interim step until clear and comprehensive regulations are defined," Sudhakar Lakshmanaraja, founder of Digital South Trust, a Web3 policy advocacy body, told Decrypt, echoing Jain’s sentiments.
Amid ongoing volatility in crypto and Web3 markets, he said India’s approach “reflects policy maturity,” and that “regulatory certainty at this stage strengthens compliance” while supporting long-term ecosystem growth.
