Policy · Financial Services

Budget proposes stricter crypto compliance rules

By Startup Enthusiast · 1 February 2026

What they do

CoinSwitch is a crypto trading platform operated by PeepalCo

Union Budget 2026-27 proposed daily penalties for non-compliance by crypto startups

Industry leaders say the move formalises tax compliance but raises operational costs

Union Budget 2026-27 proposed increased reporting compliance for crypto startups.
A penalty of INR 200 per day is proposed for not furnishing transaction statements.
A flat INR 50,000 penalty is proposed for furnishing inaccurate particulars or failing to correct them.
The rules aim to enforce compliance with section 509 of the Income-tax Act, 2025.
Currently, there is no penal provision for accurate and timely disclosures by crypto exchanges.
The new rules, if accepted, will be effective from April 1, 2026.
In January 2026, India's FIU classified crypto exchanges as reporting entities under PMLA.

The move is seen as legitimising crypto trading despite no official legal status for cryptocurrencies.
Crypto assets currently lack investor protection mechanisms that come with regulated asset classes.
Some industry players say compliance costs will hinder growth of crypto startups.
India topped the Chainalysis 2025 Global Crypto Adoption Index as of September 2025.

CoinSwitch is a crypto trading platform operated by PeepalCo.
It follows a 'Compliance-First' model for tax and reporting standards.
The platform has launched education initiatives to promote tax compliant transactions.
CoinSwitch works with the government towards a balanced, user-first tax regime.

CoinSwitch will continue working with the government towards a balanced, user-first tax regime.
The platform aims to pair robust oversight with economic viability.