Crypto regulation update, September 2026: the Finance committee wraps its VDA study and waits on the government

This week's crypto regulation news from India: as reported on 17 September 2026, Parliament's Standing Committee on Finance has concluded its discussions on virtual digital assets and is waiting for the government's response before it prepares its report. No law has been passed, no rule has changed, and the committee's report, when it comes, will be a set of recommendations.

For anyone who holds Bitcoin in India, the practical position is the same as it was last week. Crypto is not banned. Gains are taxed at a flat 30% plus cess, with 1% TDS on transfers. Platforms must register with FIU-IND under the anti-money-laundering law. What follows is what happened, what the study is, what each side told the committee, and what to watch next. Only dated facts, no predictions.

What happened this week

As reported on 17 September 2026:

• The Standing Committee on Finance had concluded its discussions on VDAs.
• It was awaiting the government's response before preparing its report.
• The tax position was noted as unchanged: 30% on gains and 1% TDS.

Reports also said the Department of Economic Affairs was scheduled to appear before the committee on 16 September 2026, the day before. I have not seen an official record of what was said in that session, so I will not characterise it.

What the study is

The committee, chaired by Bhartruhari Mahtab, has been working on a study titled "A Study on Virtual Digital Assets (VDAs) and Way Forward". It had been under discussion for about a year.

A parliamentary committee study is how Parliament examines a subject in depth: it calls witnesses from ministries, regulators and professional bodies, hears their positions, and then writes a report with recommendations to the government. Those recommendations carry weight, but they are advisory. They do not become law unless the government acts on them, usually through a bill passed by Parliament.

So "the committee has finished its discussions" means one step is done. The government's response comes next, then the report. Until a report is tabled, nobody outside the committee knows exactly what it will recommend.

What the RBI and ICAI told the panel

Two submissions to this committee earlier in the year show how far apart the views are.

The RBI told the committee, as reported on 3 July 2026, that VDAs should not be legalised. Deputy Governor Rohit Jain and Executive Director P. Vasudevan argued that a regulatory framework would create a "false perception of safety", and recommended barring banks from exposure to crypto and private stablecoins.

ICAI, the Institute of Chartered Accountants of India, told the committee that a comprehensive VDA law is needed.

The RBI's presentation also gave a picture of the market: 54 FIU-registered service providers and 39.3 million KYC-verified users holding about ₹20,437 crore.

The same committee touched VDAs in a separate report as well. Its report on the Securities Markets Code, reported on 27 July 2026, called the exclusion of VDAs a "regulatory grey area". It recommended an appropriate regulatory framework and, until a law exists, an interim arrangement through Self-Regulatory Organisations under a regulator such as the RBI or SEBI. Those recommendations are also advisory.

I have watched the RBI's position on this since our first months at Unocoin in 2013, when it issued its first cautionary note. In 2018 it cut crypto businesses off from banking, and the Supreme Court set that circular aside in 2020. The RBI has been consistent. So has the industry's request for clear rules. The committee is where those two views meet.

Why the RBI's view carries weight

The RBI's position matters beyond the committee room because banks are the rupee on-ramp for every Indian platform. The last time the RBI acted on its concerns, in April 2018, it did it through a circular to banks rather than a law, and the Supreme Court set that circular aside in March 2020 as disproportionate while confirming the RBI's power to regulate. Its recommendation this year to bar banks from crypto exposure is a recommendation to a committee. It is not a new circular, and nothing has been issued.

What does not change for you

None of this week's news changes a rule. Here is what applies today, the same as before:

• Tax: income from transferring a VDA is taxed at a flat 30% under section 115BBH, plus surcharge and cess, with only the cost of acquisition deductible. Losses cannot be set off or carried forward.
• TDS: 1% under section 194S, now covered by section 393 of the Income-tax Act, 2025, subject to the ₹10,000 and ₹50,000 yearly thresholds.
• Filing: every sale, swap and spend goes in Schedule VDA in ITR-2 or ITR-3.
• Reporting by platforms: under CBDT's guidance on the Crypto-Asset Reporting Framework, platforms report 2026 transactions in Form 167 by 31 May 2027.
• Anti-money-laundering: platforms that serve Indian users must register with FIU-IND as reporting entities under the PMLA and verify customers.

One more dated item from this month that does affect users directly. On 9 September 2026, FIU-IND issued notices under section 13 of the PMLA to 15 offshore VDA service providers and sought takedown of their apps and websites for non-compliance. In the same release it repeated that crypto products and NFTs are "unregulated and can be highly risky", with possibly no regulatory recourse for any loss.

The deadlines that matter to most readers right now are tax ones. If you file ITR-3 with a tax audit, check the current due date on the portal. If you have not yet downloaded your full transaction history for the year, do it now.

How this fits the year so far

For context, the dated India crypto policy events of 2026 up to this week, as reported:

• 1 April: the Income-tax Act, 2025 takes effect, along with Budget 2025's crypto changes, including section 285BAA reporting and a wider VDA definition.
• 17 June: the Enforcement Directorate searches premises linked to five Bengaluru crypto payment firms under FEMA, over alleged unauthorised cross-border transfers. These are allegations.
• 3 July: the RBI's position to the Finance committee is reported: VDAs should not be legalised.
• Late July: CBDT guidance on the Crypto-Asset Reporting Framework is reported; platforms will report 2026 transactions in Form 167.
• 27 July: the committee's report on the Securities Markets Code is reported, recommending a VDA framework and interim SROs.
• 31 July and 31 August: ITR due dates for most filers for AY 2026-27.
• 9 September: FIU-IND issues notices to 15 offshore platforms and seeks takedowns.
• 16 to 17 September: the Department of Economic Affairs is scheduled before the committee; the committee concludes its VDA discussions.

Read together, the direction this year has been more reporting and more enforcement of existing rules, while the bigger question of a dedicated law stays open.

What comes next

The sequence from here, as reported:

1. The government responds to the committee.
2. The committee prepares its report on VDAs.
3. The report is tabled in Parliament.
4. The government decides whether to act on its recommendations.

No dates have been confirmed for steps 1 to 4. I will not guess at them, and I would be careful with anyone who does.

If you hold Bitcoin, the useful things to do this week are the boring ones: use a platform registered with FIU-IND, keep your records, and file every sale. Unocoin is registered with FIU-IND as a reporting entity under the PMLA.

We follow this every week. If you want the next step explained in plain English when it happens, sign up for the India Bitcoin Brief. The full tax rules are in our tax guide, and the history of the 2018 circular is on our Supreme Court page.

Keep reading

Sources

• Outlook Money, government response expected, panel to submit report (17 Sep 2026)
• Cryptopolitan, RBI to the Finance committee (3 July 2026)
• MediaNama, Securities Markets Code report and VDAs (July 2026)
• DD News, FIU-IND notices to 15 offshore platforms (9 Sep 2026)
• Inc42, CBDT's CARF guidance
• Taxguru, scheme of taxation of VDAs
• TDSMAN, TDS on VDAs under section 393(1)