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Income Tax Act 2025 · Penalties

Penalties under the Income-tax Act 2025

When penalties apply — under-reporting and misreporting of income, TDS defaults, late filing and more, and how they are computed and can be contested.

Chapter XXI of the Income-tax Act, 2025 sets out the penalties for non-compliance. The most significant is the penalty for under-reporting and misreporting of income — broadly 50% of the tax on under-reported income and up to 200% for misreporting — the successor to Section 270A.

Other penalties cover TDS/TCS defaults, failure to maintain or audit accounts, late filing, and non-response to notices. Many penalties can be reduced or dropped where there is a reasonable cause, which is why a proper reply matters.

See the sections below for each penalty, and ask in the discussion if a penalty has been proposed against you.

Sections in this topic

§439
Section 439 of the Income-tax Act, 2025 — Penalty for Under-reporting and Misreporting of Income
Penalty for under-reporting and misreporting of income
§440
Section 440 of the Income-tax Act, 2025 — Immunity from Penalty and Prosecution
Section 440
§441
Section 441 of the Income-tax Act, 2025 — Penalty for Failure to Keep, Maintain or Retain Books of Account
Failure to keep, maintain or retain books of account, documents, etc
§442
Section 442 of the Income-tax Act, 2025 — Penalty for Failure to Keep, Maintain or Report Transfer Pricing Documentation
Respect of certain transactions
§443
Section 443 of the Income-tax Act, 2025 — Penalty on Unexplained / Undisclosed Income (Cash Credits, Unexplained Investments)
Section 443
§444
Section 444 of the Income-tax Act, 2025 — Penalty for False Entry or Fake Invoices in Books of Account
Penalty for false entry, etc., in books of account
§445
Section 445 of the Income-tax Act, 2025 — Penalty for Benefits to Related Persons by a Non-Profit Organisation
Benefits to related persons
§446
Section 446 of the Income-tax Act, 2025 — Penalty for Failure to Furnish Information on a Crypto-Asset (VDA) Transaction
Information on transaction of crypto-asset
§447
Section 447 of the Income-tax Act, 2025 — Penalty for Failure to Furnish the Transfer-Pricing Accountant's Report under Section 172
Penalty for failure to furnish report under section 172
§448
Section 448 of the Income-tax Act, 2025 — Penalty for Failure to Deduct Tax at Source (TDS)
Penalty for failure to deduct tax at source
§449
Section 449 of the Income-tax Act, 2025 — Penalty for Failure to Collect Tax at Source (TCS)
Penalty for failure to collect tax at source
§450
Section 450 of the Income-tax Act, 2025 — Penalty for Accepting Cash Loans, Deposits or Specified Sums in Breach of Section 185
Penalty for failure to comply with provisions of section 185
§451
Section 451 of the Income-tax Act, 2025 — Penalty for Failure to Comply with Section 186 (Cash Receipt of ₹2 Lakh or More)
Penalty for failure to comply with provisions of section 186
§452
Section 452 of the Income-tax Act, 2025 — Penalty for Failure to Provide Electronic Payment Facility (Section 187)
Penalty for failure to comply with provisions of section 187
§453
Section 453 of the Income-tax Act, 2025 — Penalty for Repaying Loans, Deposits or Specified Advances in Cash (Contravention of Section 188)
Penalty for failure to comply with provisions of section 188
§454
Section 454 of the Income-tax Act, 2025 — Penalty for Failure to Furnish Statement of Financial Transaction (SFT) or Reportable Account
Account after a notice
§456
Section 456 of the Income-tax Act, 2025 — Penalty for Failure by an Eligible Investment Fund to Furnish the Required Statement
Eligible investment fund
§457
Section 457 of the Income-tax Act, 2025 — Penalty for Failure to Furnish Transfer Pricing Information or Documents under Section 171
Penalty for failure to furnish information or document under section 171
§458
Section 458 of the Income-tax Act, 2025 — Penalty for Failure to Furnish Information on Indirect Transfers (Section 506)
Section 458
§459
Section 459 of the Income-tax Act, 2025 — Penalty for Country-by-Country (CbC) Reporting Failures
Section 511
§460
Section 460 of the Income-tax Act, 2025 — Penalty for Failure to Submit Liaison Office Statement (Section 505)
Section 460
§461
Section 461 of the Income-tax Act, 2025 — Penalty for Failure to Furnish TDS/TCS Statements
Penalty for failure to furnish statements, etc
§462
Section 462 of the Income-tax Act, 2025 — Penalty for Failure to Furnish Information on Foreign Remittances (Form 15CA/15CB)
Under section 397(3)(d)
§463
Section 463 of the Income-tax Act, 2025 — Penalty on Accountants, Merchant Bankers and Registered Valuers for Incorrect Information in Reports or Certificates
Penalty for furnishing incorrect information in reports or certificates
§464
Section 464 of the Income-tax Act, 2025 — Penalty for Failure to Furnish Donation Statements and Certificates (Form 10BD / 10BE)
Penalty for failure to furnish statements, etc
§465
Section 465 of the Income-tax Act, 2025 — Penalty for Failure to Answer Questions, Sign Statements, Furnish Returns/Statements or Allow Inspection
Returns or statements, allow inspections, etc
§466
Section 466 of the Income-tax Act, 2025 — Penalty for Failure to Comply with Section 254 (Power to Call for Information)
Penalty for failure to comply with the provisions of section 254
§467
Section 467 of the Income-tax Act, 2025 — Penalty for PAN and Aadhaar Defaults (₹10,000 per Default)
Section 467
§468
Section 468 of the Income-tax Act, 2025 — Penalty for Failure to Comply with Section 397 (TAN / TDS-TCS Account Number Rules)
Penalty for failure to comply with the provisions of section 397
§469
Section 469 of the Income-tax Act, 2025 — Power to Reduce or Waive Penalty in Certain Cases
Power to reduce or waive penalty, etc., in certain cases
§470
Section 470 of the Income-tax Act, 2025 — Penalty Not to Be Imposed for Reasonable Cause
Penalty not to be imposed in certain cases
§471
Section 471 of the Income-tax Act, 2025 — Procedure for Imposing Penalty & Opportunity of Being Heard
Procedure
§472
Section 472 of the Income-tax Act, 2025 — Bar of Limitation for Imposing Penalties
Bar of limitation for imposing penalties

Frequently asked questions

What is the penalty for under-reporting income?
Broadly 50% of the tax on under-reported income, rising to 200% for misreporting (the successor to Section 270A). A proper reply showing reasonable cause can reduce or avoid it.
Disclaimer: Educational overview of the Income-tax Act, 2025 (effective 1 April 2026), not professional advice. Confirm your position with our team before acting.

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§439 — Section 439 of the Income-tax Act,...§440 — Section 440 of the Income-tax Act,...§441 — Section 441 of the Income-tax Act,...§442 — Section 442 of the Income-tax Act,...§443 — Section 443 of the Income-tax Act,...§444 — Section 444 of the Income-tax Act,...§445 — Section 445 of the Income-tax Act,...§446 — Section 446 of the Income-tax Act,...§447 — Section 447 of the Income-tax Act,...§448 — Section 448 of the Income-tax Act,...§449 — Section 449 of the Income-tax Act,...§450 — Section 450 of the Income-tax Act,...§451 — Section 451 of the Income-tax Act,...§452 — Section 452 of the Income-tax Act,...§453 — Section 453 of the Income-tax Act,...§454 — Section 454 of the Income-tax Act,...§456 — Section 456 of the Income-tax Act,...§457 — Section 457 of the Income-tax Act,...§458 — Section 458 of the Income-tax Act,...§459 — Section 459 of the Income-tax Act,...§460 — Section 460 of the Income-tax Act,...§461 — Section 461 of the Income-tax Act,...§462 — Section 462 of the Income-tax Act,...§463 — Section 463 of the Income-tax Act,...§464 — Section 464 of the Income-tax Act,...§465 — Section 465 of the Income-tax Act,...§466 — Section 466 of the Income-tax Act,...§467 — Section 467 of the Income-tax Act,...§468 — Section 468 of the Income-tax Act,...§469 — Section 469 of the Income-tax Act,...§470 — Section 470 of the Income-tax Act,...§471 — Section 471 of the Income-tax Act,...§472 — Section 472 of the Income-tax Act,...

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