New Provision
Section 446, IT Act 2025
Replaces (IT Act 1961)
271B
Chapter
Chapter XX — Penalties
Effective From
1 April 2026
Statutory Text — Section 446
any person fails to get his accounts audited for any tax year or years or furnish the audit report as required under section 63, the Assessing Officer may impose a penalty on such person, which shall be the lesser of–– (a) 0.5% of the total sales, turnover, or gross receipts in business, or the gross receipts in profession for such tax year or years; or (b) ₹150000.
Shahi & Co. — Our Understanding
This section falls under Chapter XX which prescribes penalties for various non-compliances under the Act.
Practical Note: Penalties under the Income Tax Act can be significant — often ranging from 50% to 200% of the tax amount involved. Voluntary disclosure and prompt correction of errors significantly reduces penalty exposure.
Shahi & Co., Chartered Accountants
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Disclaimer: This is a reproduction of Section 446 of the Income Tax Act, 2025 (No. 30 of 2025) as published in the Official Gazette of India (CG-DL-E-22082025-265620) for informational and reference purposes only. Shahi & Co., Chartered Accountants makes no warranty as to completeness or accuracy. For the official authenticated text refer to
egazette.gov.in or
incometaxindia.gov.in. This does not constitute legal or tax advice.