Section 429 of the Income-tax Act, 2025 — Fee for Default Relating to a TDS/TCS Statement or Certificate (₹200/Day)

In plain language

What Section 429 says in plain English

Section 429 of the Income-tax Act, 2025 (in force from 1 April 2026) imposes a flat, automatic fee of ₹200 for every day of delay where certain reporting entities fail to file a prescribed statement or fail to issue a prescribed certificate on time. It sits in the same family as the old Section 234E of the Income-tax Act, 1961, which levied ₹200 per day for late TDS/TCS statements. Under the 2025 Act, the general TDS/TCS quarterly-statement fee is carried by Section 427, while Section 429 extends the same ₹200-per-day discipline to the donation and scientific-research reporting stream — statements and certificates that let a donor actually claim a deduction.

Who it applies to

• Research associations, universities, colleges and institutions covered by section 45(3)(a), and companies referred to in section 45(3)(b), that receive sums for scientific/social science/statistical research and must report those receipts and issue donation certificates under section 45(4)(a).
• Charitable/religious institutions and funds that receive donations eligible for deduction and must file the donation statement under section 354(1)(e) and issue the donor certificate prescribed under section 354(1)(g).

In short, it applies to the donee institutions — the recipients of eligible donations — not to the individual donor. If these bodies miss their filing/certification deadline, the fee bites on them.

The two limbs of default

• Late statement: failing to deliver the prescribed reporting statement (the successor to Form 10BD-type donation statements) within the prescribed time.
• Late/missing certificate: failing to furnish the prescribed donation certificate to the donor (the successor to the Form 10BE-type certificate) within time.

Key conditions and limits

• Rate: ₹200 for every day during which the failure continues — it keeps accruing until the statement is filed or the certificate is issued.
• Cap: the total fee cannot exceed the amount in respect of which the failure occurred (broadly, the amount that should have been reported/certified). This mirrors 234E's cap.
• Pay before you file: the fee must be paid before delivering the statement or furnishing the certificate. You cannot file the pending statement without first clearing the accumulated fee.
• Automatic, not discretionary: like 234E, this is a fee, not a penalty. There is no requirement for the officer to prove reasonable cause before it is charged; it is levied by operation of law.

How it interacts with related sections

• Section 427 is the direct heir of Section 234E for ordinary quarterly TDS/TCS statements (Forms 24Q/26Q/27Q/27EQ) — also ₹200/day, capped at the TDS/TCS involved. Section 429 is the parallel provision for the donation-reporting ecosystem.
• Section 461 is the successor to Section 271H (penalty of ₹10,000 to ₹1,00,000 for non-filing or filing wrong particulars). The 429 fee and a 461 penalty are separate mechanisms and can both apply to the same default.
• Because the donor's deduction typically depends on the institution's statement and certificate, a 429 default can indirectly hold up a genuine donor's tax benefit — a strong compliance incentive for institutions.

Practical implications

• Institutions should treat the donation statement and certificate deadlines as hard dates — the fee is unforgiving and cannot be waived like a discretionary penalty.
• Since the fee is capped at the amount involved, a small-value default carries a proportionately small cap, but for large donation volumes the ₹200/day can build up to a meaningful cap quickly.
• Finance teams should reconcile donation receipts and issue certificates well before the due date, keeping proof of the payment of any fee before uploading the delayed statement.