India’s Union Budget 2026 has sparked mixed reactions across the cryptocurrency and blockchain community. While the government introduced measures to tighten compliance on crypto-asset reporting, industry leaders believe it missed the mark in promoting long-term growth in the rapidly evolving Web3 and digital asset space.
Stricter Penalties, Yet Unchanged Tax Framework
Announced by Union Finance Minister Nirmala Sitharaman, the 2026 Budget retains India’s existing crypto tax framework, despite numerous calls for reform. The Finance Bill introduces penalties for non-compliance under Section 509 of the Income-tax Act, 2025. Entities failing to file crypto transaction statements will incur a penalty of ₹200 per day. Additionally, furnishing incorrect or misleading information, or failing to correct such errors, will attract fines up to ₹50,000. These revised penalties take effect from April 1, 2026.
Industry Leaders Call for Tax Reforms
Sathvik Vishwanath, Co-founder and CEO of Unocoin, expressed disappointment with the Budget’s narrow focus. As he explained to Coinpedia, “The Union Budget 2026 was expected to play a decisive role in shaping India’s approach to crypto and Web3 technologies. However, it fell short of addressing the restrictive tax regime for virtual digital assets.”
Vishwanath highlighted key reforms expected by industry stakeholders, including:
- Allowing loss set-offs to restore liquidity in the domestic market.
- Reducing transaction-level friction for easier compliance.
- Aligning crypto taxation with other asset classes to create a level playing field.
He further noted how these changes could have encouraged compliant participation while retaining market activity within India.
The Need for a Defined Regulatory Framework
Another significant concern raised by industry players is the lack of clarity around regulatory policies. For businesses and investors alike, the absence of a dedicated crypto-specific framework continues to be a major stumbling block.
According to Sathvik, key components of such a framework include:
- Clear definitions for virtual assets.
- Licensing norms for crypto exchanges.
- Strict compliance standards and consumer protection mechanisms.
“Regulatory ambiguity has already reduced local trading volumes and pushed users toward offshore platforms,” emphasizes Vishwanath. Creating a well-structured regulatory framework would allow India to compete with global crypto hubs like Dubai and Singapore.
Learning from Global Leaders
Countries like Dubai and Singapore have steadily moved ahead by implementing crypto-friendly regulations. Dubai’s purpose-built digital asset rules and Singapore’s structured licensing models offer compelling examples of how nations can foster innovation while maintaining oversight. Meanwhile, the U.S. is gradually aligning its own frameworks to classify digital assets more clearly.
India’s inability to match these developments hampers its ability to attract global capital and talent. “To compete internationally, India needs clarity and cohesiveness in its approach to crypto regulation,” Sathvik said.
A Call for Change
For India to remain a global tech hub, the Union Budget must serve as a roadmap for Web3 innovation. Transparent regulations and a more aligned tax regime are not just industry demands — they are prerequisites for sustainable growth. As the global adoption of blockchain technology accelerates, the time to act is now.
For crypto enthusiasts navigating these changes, tools like the Ledger Nano X, a secure hardware wallet, can help ensure safe storage of your digital assets. Stay proactive to remain compliant and secure in this evolving landscape.
