Income Tax Act, 2025  ·  Chapter XX — Penalties  ·  Section 455

Section 455
Penalty for furnishing inaccurate statement of

IT Act 2025 Chapter XX Effective 1 April 2026 Old: 271FAA
New Provision
Section 455, IT Act 2025
Replaces (IT Act 1961)
271FAA
Chapter
Chapter XX — Penalties
Effective From
1 April 2026
Statutory Text — Section 455

he prescribed income-tax authority referred to in section 508 may direct that a person required to furnish a statement under sub-section (1) of the said section shall pay penalty of ₹50000, if such person— (a) provides inaccurate information in the statement or fails to furnish correct information within the period specified under section 508(8); or (b) fails to comply with the due diligence requirement under section 508(9). (2) The prescribed income-tax authority referred to in section 508, shall direct that reporting financial institution referred to in section 508(1)(k) of the, shall, in addition to the penalty under sub-section (1) of this section, if any, pay a sum of ₹5000 for every inaccurate reportable account, if–– (a) the said institution provides inaccurate information in the statement required to be furnished under section 508(1); and (b) the inaccuracy in the said statement is due to false or inaccurate information furnished by the holder or holders of the relevant reportable account or accounts. (3) The reporting financial institution as referred to in sub-section (2) shall be entitled to–– (a) recover the amount paid under sub-section (2) on behalf of the reportable account holder; or (b) retain an amount equal to the sum so paid out of any moneys that may be in its possession, or may come to it from every such account holder.

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 455 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.