India’s 2026 fiscal year budget has been announced, but there have been significant changes related to cryptocurrencies. On the tax front, the existing 30% profit tax and 1% withholding tax have been maintained, but the government appears to have shifted toward strengthening compliance.

What stands out is the new penalty framework. Under the revised regulations effective April 1, a fine of ₹200 (about $2.20) will be imposed for each day of failure to meet reporting obligations. In addition, it is said that a fixed penalty of ₹50,000 (about $545) will apply for incorrect filings or omissions in corrections. In other words, it’s not just about paying taxes—accurate reporting is now being strictly required.

Industry reactions are complex. Executives from domestic exchanges pointed out, “The current cryptocurrency tax regime taxes transactions without recognizing losses, which is a major issue for retail participants,” and they had requested a reduction of the TDS rate from 1% to 0.01%. However, the government has shelved the revision. Concerns about reduced liquidity and continued outflows of transactions to overseas markets have not been dispelled.

Under these circumstances, XRP fell from $1.36 to $1.33 while accompanied by trading volume. It is currently trading around $1.33, but selling pressure appears to be stronger against resistance near $1.40. If it breaks below $1.33, the risk of further downside could increase.

The government’s position is also understandable. The intention to prevent tax evasion and secure tax revenue by increasing reporting transparency is clear. However, from the industry’s perspective, it looks like only the new regulatory reporting obligations are being added while the existing friction remains in place. Going forward, this will be a period where market participants will closely watch how this tax and reporting system will function.