Key Highlights
- Union Budget 2026 makes no mention of private cryptocurrencies; 30% tax and 1% TDS remain unchanged.
- India has over 90 million crypto users and $120B in retail Bitcoin holdings but still lacks a regulatory framework.
- Government plans for RBI digital rupee and stablecoins continue, but private crypto regulation remains absent.
Union Budget 2026 has once again passed without any reference to cryptocurrency, extending India’s long-standing silence on crypto regulation. There was no mention of digital assets, no indication of a regulatory framework, and no change to the existing tax structure introduced in 2022.
The 30% tax on crypto gains and the 1% TDS on every transaction continue for the fourth straight year. Since their introduction, these measures were expected to act as interim steps until clearer rules were put in place. Budget 2026 indicates that this transition has yet to occur.
Crypto remains taxed, but not recognised.
Four years since the crypto tax, still no policy framework
When crypto taxation was announced in 2022, the government indicated that regulation would follow. That framework is still missing.
Budget 2026 does not explain how crypto is treated under Indian law. It is still unclear whether it is considered an asset, a security, or a speculative instrument. The budget also does not mention investor protection, exchange licensing, or the place of crypto in the wider financial system.
This continued silence reinforces the impression that crypto is being treated more like gambling than as a financial or technology-based asset.
Industry Reactions
Reacting to the Union Budget 2026, Edul Patel, CEO of Mudrex, said the decision to retain the existing tax framework brings continuity but falls short of industry expectations.
“The Union Budget’s decision to maintain the existing taxation framework for Virtual Digital Assets provides continuity, but the industry was hoping for calibrated reforms to improve market participation and onshore liquidity.”
He added that despite regulatory and tax hurdles, the sector continues to expand, and targeted reforms could have strengthened India’s global position.
“While the sector continues to grow despite regulatory and tax challenges, the rationalisation of transaction taxes and enabling loss offsets would have further strengthened India’s competitiveness in the global digital asset economy.”
Patel noted that the industry remains hopeful that ongoing engagement with policymakers will lead to a more supportive environment.
“We remain optimistic that continued dialogue between industry and policymakers will help shape a more growth-oriented framework going forward.”
— Edul Patel, CEO, Mudrex
Meanwhile, Ashish Singhal, Co-founder of CoinSwitch, welcomed the introduction of explicit penalty provisions, calling them a step forward for compliance in the crypto ecosystem.
“The introduction of specific penalty provisions is a positive milestone for the crypto industry. By mandating a ₹200 daily penalty for reporting delays and a ₹50,000 fine for inaccuracies, the Government has formalized high standards of tax compliance and reporting for both users and VASPs.”
He said these measures validate the compliance-first approach followed by Indian platforms.
“This validates the ‘Compliance-First’ model of Indian platforms like CoinSwitch, shielding users from reporting risks and aligning with compliance goals.”
However, Singhal cautioned that compliance alone would not be enough to drive sustainable growth in the sector.
“While compliance and surveillance have tightened, true growth requires economic rationalization to keep Web3 innovation and talent within India.”
He pointed to existing tax provisions as barriers to genuine participation.
“The 1% TDS, lack of offset of losses and the 30% flat capital gains rate create an asymmetric environment for genuine participation.”
According to Singhal, such measures could push users toward offshore platforms.
“These measures risk driving Indian capital toward non-compliant offshore platforms, leaving users vulnerable to legal and financial scrutiny.”
He reiterated CoinSwitch’s commitment to working with policymakers on reforms.
“CoinSwitch remains fully committed and we will continue to work with the Government towards a balanced, user-first tax regime that pairs robust oversight with economic viability.”
— Ashish Singhal, Co-founder, CoinSwitch
In a separate remark, Edul Patel said the proposed penalties signal a broader policy push towards transparency and accountability.
“The proposed penalties for non-disclosure and misreporting of crypto assets reflect a broader policy shift towards strengthening compliance and transparency in India’s digital asset ecosystem, building on the recently updated FIU-IND guidelines for exchanges.”
He added that clearer accountability helps align crypto with mainstream financial standards.
“By creating clearer accountability, these measures bring crypto transactions closer to mainstream financial reporting standards.”
Patel concluded that long-term growth would depend on trust and regulatory clarity.
— Edul Patel, CEO, Mudrex
“Long-term growth in the sector depends not only on innovation, but also on trust, consistency, and regulatory clarity, and measures like these move the industry in the right direction.”
Commenting on the Budget, SB Seker, Head of APAC at Binance, said the Union Budget 2026:
“reiterates India’s focus on building the foundations of a Viksit Bharat, with continued emphasis on digital public infrastructure such as AI, data centres, and cloud-led growth.
“From a digital assets perspective, the Budget maintains the existing taxation framework. At the same time, it underlines the need for a more forward-looking tax approach that evolves with market maturity, technological convergence, and India’s broader digital ambitions.
“Globally, governments are moving towards clearer and more calibrated tax and compliance frameworks for digital assets. Binance believes that globally aligned tax policies, combined with strong compliance standards and investor education, can support sustainable long-term growth.”
India leads global crypto adoption despite policy silence
India remains a global leader in crypto adoption, with more than 90 million users as of 2024. The country has the largest crypto user base in the world, mainly driven by retail investors, a young population, and widespread access to mobile trading apps.
In November 2025, India became the world’s second-largest holder of Bitcoin, with retail investors holding nearly $120 billion worth of the asset. This placed the country just behind the United States in terms of retail Bitcoin holdings.
Despite the scale of adoption and capital involved, crypto does not find any mention in the country’s most important fiscal policy document.
Crackdowns increase even as regulation remains absent
Even as crypto remains outside budget discussions, regulatory action around the sector has picked up.
Earlier this year, the Financial Intelligence Unit (FIU) tightened the screws on crypto platforms by pushing stricter KYC compliance norms. Exchanges were asked to strengthen verification and reporting processes, adding regulatory pressure without offering legal clarity.
From April 2026, authorities will also be able to track crypto-related emails and social media activity, expanding oversight of digital asset discussions and transactions.
The focus, for now, appears to be on monitoring and enforcement rather than putting a formal regulatory framework in place.
Stablecoin signals and digital rupee add to confusion
The silence in Budget 2026 stands in contrast to recent government statements on digital assets.
In October, Finance Minister Nirmala Sitharaman urged nations to prepare for stablecoins, recognising their growing role in global finance and cross-border payments. Around the same period, the government reiterated its plans to expand the RBI-backed digital currency.
But Union Budget 2026 stays silent on where private cryptocurrencies fit into this wider plan. There is still no clarity on whether India intends to introduce a sovereign stablecoin or how it would work alongside crypto assets already used by millions of Indians.
Taxed, tracked but still ignored
The continued exclusion of crypto from the Union Budget 2026 reflects the gap between how widely crypto is used in India and how it is dealt with at the policy level.
Crypto in India continues to be heavily taxed and closely monitored, but it still functions without a clear regulatory framework. With millions of users and substantial retail money already involved, the lack of direction raises a basic question: how long can the government continue to delay taking a clear policy call?
As the Union Budget 2026 ends without addressing crypto once again, that question remains unanswered. Why does a country that leads global crypto adoption continue to avoid spelling out crypto’s place in its financial system?
