Union Finance Minister Nirmala Sitharaman presented Budget 2026-2027 in Parliament on Feb.1, 2026. The budget included several proposals to boost growth: scale up manufacturing in seven strategic sectors, incentivize MSME growth, and establish Rare Earth corridors. The budget is presented against the backdrop of strong growth and low inflation in India.
Budget Proposal on Reporting Crypto Transactions
The budget did not have specific tax proposals for Virtual Digital Assets (VDAs) and crypto.
However, the Budget proposed a penalty provision on reporting entities that fail to furnish a statement or provide inaccurate information regarding transactions involving crypto assets. Accordingly, the government has proposed to introduce a penalty of Rs. 200 per day for non-furnishing of statement and Rs. 50,000 for furnishing inaccurate particulars and failure to correct such inaccuracy. The penalty provisions will take effect on April 1, 2026.
Crypto assets are unregulated in India. However, it may be recalled that the government introduced taxes on VDAs, including crypto and NFTs, in Budget 2022, which took effect on April 1, 2023.
Read more here: Section 115BBH: Virtual Digital Assets Taxation Scheme
Capex Increased
Government spending (public capital expenditure) is driving growth, with investments in roads, railways, and logistics corridors. Continuing the government-led capex initiatives, the government sought to boost economic growth by increasing capex to Rs. 12.2 trillion in FY 2027. In line with the government’s infrastructure push, it proposed launching 7 new high-speed rail corridors across the country.
Tax Proposals
In last year’s budget, the government had comprehensively overhauled tax slabs to boost consumer spending. The New Income Tax Bill, introduced in Budget 2025, will come into effect on April 1, 2026.
The finance minister did not make any new announcements regarding income tax slabs in the Budget 2026. While the Budget 2026 did not have specific tax proposals other than STT on F&O, the government proposed to tax buybacks. Accordingly, tax buybacks for all types of shareholders will be treated as capital gains. However, promoters will pay an additional buyback tax.
However, the Budget proposed some changes to TDS and TCS rates. While TCS on overseas tour packages has been cut to 2% (5% to 20% earlier), the TCS rate under the Liberalized Remittance Scheme (LRS) for education and medical expenses abroad is proposed to be cut from 5% to 2%.
Regarding tax filing, the existing timeline to file ITR-1 and ITR-2 will remain as July 31. However, for those who file revised income tax returns, the deadline has been extended till March 31, subject to a small fee.
Another significant change proposed in the Budget is the cut in the Minimum Alternate Tax (MAT). Accordingly, the MAT will be cut from 15% to 14%.
Watch this space as we decode the Union Budget for you in the coming days.
