Section 462 of the Income-tax Act, 2025 — Penalty for Failure to Furnish Information on Foreign Remittances (Form 15CA/15CB)

In plain language

What Section 462 actually deals with (scope verified)

Although this provision is sometimes loosely tagged as a "TDS/TCS statement" penalty, on verification its actual scope is narrower and specific. Section 462 of the Income-tax Act, 2025 imposes a penalty where a person fails to furnish the information required under section 397(3)(d), or furnishes inaccurate information. Section 397(3)(d) is the provision that obliges any person responsible for paying any sum to a non-resident (or foreign company) to report the details of that payment/remittance in the prescribed form and manner — the successor to section 195(6) of the old Income-tax Act, 1961. In practice this is the Form 15CA / Form 15CB regime (re-notified as Form No. 145 and Form No. 146 under the 2025 Act framework).

The penalty for the routine TDS/TCS quarterly statement default (old section 271H) sits in the adjacent Section 461, keyed to section 397(3)(b). So do not confuse the two: 461 = late/incorrect TDS-TCS return; 462 = missing/wrong foreign-remittance information.

The 1961-Act equivalent

• Section 462 (2025 Act) ≈ Section 271-I (1961 Act) — penalty for failure to furnish information, or furnishing inaccurate information, in respect of a payment to a non-resident under section 195(6).
• The reporting obligation itself moved from section 195(6) → section 397(3)(d) of the 2025 Act.

Who it applies to

• Any "person" making a payment to a non-resident or a foreign company — companies, firms, LLPs, individuals, HUFs, trusts, and others.
• It bites the remitter (the payer), not the non-resident recipient.
• It applies whether or not the sum is chargeable to tax in India — the information/reporting duty under 397(3)(d) exists even for many non-taxable remittances, so a "no TDS was due" argument does not by itself excuse a reporting failure.

The amount of the penalty

• A fixed penalty of ₹1,00,000. Unlike the TDS-return penalty in Section 461 (a range of ₹10,000 to ₹1,00,000), Section 462 is a single flat figure, not a slab.
• It is a penalty, not a fee — it is discretionary and levied by the tax authority, distinct from the daily late-filing fee under Section 427 (old section 234E) that applies to TDS/TCS statements.

Key conditions and how it is triggered

• Non-furnishing: the remitter never files the required remittance information (Form 15CA / 145), or
• Inaccurate furnishing: the information filed is wrong — incorrect PAN/TAN, wrong nature-of-remittance code, wrong DTAA rate, understated amount, etc.
• Being levied is subject to the general "reasonable cause" defence that runs through the penalty chapter of the Act (successor to section 273B). If the remitter shows a genuine, bona-fide reasonable cause for the lapse, the authority may drop the penalty.
• Standard show-cause / opportunity-of-being-heard safeguards apply before any penalty order.

How it interacts with related sections

• Section 397(3)(d) — the parent compliance obligation (report foreign remittances).
• Section 393 (old section 195) — the charging section for TDS on payments to non-residents; if tax was deductible and not deducted, separate consequences follow.
• Section 461 — separate penalty for TDS/TCS statement defaults (old 271H). A single quarter can attract 461 and 462 if both a return and a remittance-information failure occur.
• Section 427 (old 234E) — daily fee for late TDS/TCS statements. This is a fee, not this penalty.
• Reasonable-cause / 273B successor — the escape valve.

Practical implications

• File Form 15CA/15CB (145/146) before remitting. The information is meant to precede the remittance; filing after the money has left is the most common trigger.
• Get the CA certificate (Form 15CB / 146) where the remittance (or aggregate in the year) crosses the prescribed threshold (traditionally ₹5,00,000) and the sum is chargeable.
• Because the penalty is a flat ₹1,00,000 per failure, a business making many foreign payments can accumulate large exposure quickly — treat every remittance as a discrete compliance event.
• Maintain documentary proof of nature of remittance and DTAA position so that, if questioned, you can either defend the accuracy of the information or establish reasonable cause.