Emdadur Choudhury, 26, a member of Muslims Against Crusades (MAC), was convicted of public disorder after burning two poppies during the two-minute silence on November 11 last year.
Judge Howard Riddle imposed the low fine despite saying Choudhury was guilty of a "calculated and deliberate insult to the dead and those who mourn them".
Members of MAC were heard chanting "British soldiers burn in hell" before the poppies were set on fire at the front of the demonstration near the Royal Geographical Society in west London, Belmarsh Magistrates heard.
Speaking after the fine was handed down Choudhury was unrepentant. Describing the public order charge against him as “insignificant” he said: "It is ridiculous for them to find me guilty of this crime which is not really a crime. You can see by the punishment they have given me. It was a political issue."
"This fine, I will wear it as a badge on my shoulder. I did it for Allah. I did it to raise awareness that these so-called soldiers are the criminals. They are the ones who should be tried for war crimes."
He added: "I get more when I get a parking ticket."
Shaun Rusling, vice chairman of the National Gulf War Veterans and Families Association, condemned the sentence. He said: “This fine is derisory. I am frankly appalled. These soldiers have given the ultimate sacrifice and you would think such actions would merit more than a £50 fine. if someone had burned a Koran outside a mosque they would be calling for someone to be put to death.”
The maximum punishment under Section 5 of the Public Order Act is a £1,000 fine for using threatening, abusive, or insulting words or behaviour that could cause harassment, alarm or distress.
Muslim Labour MP Khalid Mahmood said the sentence was inadequate.
He said: “We don't take it seriously enough, he hurt a lot of people. I really don't think it is acceptable to protest against people who have died for their country."
The incident took place as MAC demonstrators clashed with English Defence League supporters timed to coincide with the end of a charity walk March For Heroes to honour servicemen and women near the Albert memorial.
The MAC group started shouting microphone-led chants including “Burn, burn British soldiers”, “British soldiers murderers” and “British soldiers terrorists” during the two-minute silence at 11am.
Choudhury was then caught on camera setting fire to two large plastic orange poppies at the centre of the demonstration.
The married father-of-two earns £480 a month working part time but also gets £792 a month in state benefits, made up of £240 working tax credit; £432 child tax credit and £120 child benefit. In addition to the fine he was ordered to pay a £15 victim surcharge.
A spokesman for The Royal British Legion said: "The Poppy is the symbol of sacrifice and valour. It offers everyone an opportunity to reflect on the human cost of conflicts past and present.
“The Two Minute Silence is a time for such reflection, and not for political protests or public disorder. We are confident that this is understood and supported by most people."
Mohammad Haque, 30, a fellow MAC member, was found not guilty of the same public order offence.
The verdict follows previous incidents in which louts have avoided jail after urinating on war memorials.
In November 2009 Philip Laing, a Sheffield University student, was photographed urinating on a war memorial while drunk. He admitted a charge of outraging public decency, characterised as an act that is lewd, obscene or disgusting. He was sentenced to 250 hours community service
