What did India Budget 2026 Have for Crypto?

February 1 was not a good day for Indian crypto traders. Finance Minister Nirmala Sitharaman presented India Budget 2026, and pretty much every hope the industry had going in got shut down. The 30% tax? Still there. The 1% TDS? Still there. On top of that, the government piled on fresh penalties that make non-compliance a lot costlier than before. Here’s exactly what changed.

The 30% Tax and 1% TDS Aren’t Going Anywhere

For months, the crypto industry in India pushed for a tax cut. Lobbies, open letters, and industry meets. Everyone had a voice. Nobody got heard.

India Budget 2026 kept the 30% tax on crypto gains exactly where it’s been. Doesn’t matter if you’re trading Bitcoin, Ethereum, or some random altcoin that launched last week. You made money? Thirty percent goes to the government. No exceptions.

The 1% TDS story’s the same. It gets pulled from your trade value before you touch a single rupee of profit. And if you end up losing money later? Tough luck. That 1% is already gone.

Speaking of losses, India Budget 2026 didn’t touch the loss offset rules either. You can’t adjust crypto losses against your other income. CoinSwitch co-founder Ashish Singhal flagged this straight away. His point? You’re getting taxed on transactions, but your losses count for nothing. That’s a rough deal for small traders stacking losses month after month.

Also Read: GENIUS Act: What You Should Know About the New U.S. Crypto Regulation Bill

New Penalties Hit From April 1, 2026

India Budget 2026 brought real teeth to crypto reporting. Starting April 1, exchanges and wallet providers have to hand over full transaction data to tax authorities under Section 509 of the Income Tax Act.

Mess up the deadline? ₹200 per day fine. That’s around $2.20 each day. Sounds small until it keeps stacking.

Get the data wrong? ₹50,000 penalty. Close to $545, straight up. Punit Agarwal, who runs KoinX, made it clear these fines land on platforms first. But let’s be real, those costs find their way to traders eventually.

One Small Win Buried in the Details

India Budget 2026 wasn’t all bad news though. One thing actually moved in traders’ favour. Criminal liability for TDS defaults got chopped down. Seven years max jail time before. Now it’s two years. Judges can also swap prison time for fines in certain cases. Peer-to-peer traders especially welcomed this one. They’ve been sitting on the wrong side of compliance for too long.

Also Read: Crypto Market Cycles Explained: Bull Markets, Bear Markets & Bitcoin Halving

India’s Crypto Traders Are Already Leaving

Here’s the bigger picture nobody’s really talking about. India ranks first globally for crypto adoption. Around 119 million people traded crypto here last year. That’s a massive number.

But over 70% of trading volume already shifted to offshore platforms because of how the tax setup works. India Budget 2026 didn’t fix any of that. If you think about it, tighter reporting and the same old taxes actually push more traders away from domestic exchanges.

Meanwhile, the government’s busy building its own digital rupee. Vikram Subburaj, CEO of Giottus, sees blockchain fitting into India’s bigger tech ambitions. But right now, the tax rules aren’t backing that vision up at all.

Also Read: What Happens If a Crypto Exchange Collapses? (FTX Lessons & Beyond)

The Bottom Line

India’s not blocking crypto. You can still trade. You can still hold. But India Budget 2026 made sure every move you make now gets tracked, taxed, and recorded. Small traders take the sharpest hit here. Exchanges will fork out more on compliance. And offshore migration? That’s only picking up speed.

If you’re trading in India, clean records and proper filings aren’t optional anymore. They’re how you survive this new setup.

Did India Budget 2026 change the crypto tax rate? 

Nope. The 30% tax on crypto gains and the 1% TDS both stayed put. No reduction, no changes at all.

What penalties do crypto exchanges face after April 2026? 

Late reporting costs ₹200 per day. Filing wrong data under Section 509 brings a ₹50,000 fine. Both rules kick in from April 1.

Can Indian traders offset crypto losses against other income? 

No, they can’t. Losses on crypto trades don’t reduce your tax bill on anything else. You also can’t carry them forward.

Did India Budget 2026 cut jail time for crypto tax defaults? 

Yes. Max jail time for TDS non-compliance dropped from seven years to two. Courts can now hand out fines instead of prison time.

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Disclaimer:

Look, we’re just journalists reporting the news here, not your financial advisors. Everything you read above is for information purposes only. Crypto is wild, unpredictable, and can absolutely wreck your savings if you’re not careful. Never invest money you can’t afford to lose. Seriously, we mean it. Do your own research, talk to actual licensed financial professionals, and remember that past performance means absolutely nothing when it comes to future results. The crypto market can turn on a dime, and what’s hot today might be toast tomorrow. We’re not responsible for your investment decisions, good or bad. Trade smart, stay safe, and don’t bet the farm on anything you read on the internet, including this article.