Clause 478: Tax Evasion Over 25 Lakh Leads to 6-7 Years Imprisonment; Lesser Amounts Face 3 Months to 2 Years.

Under Clause 478 of the Income Tax Bill, 2025, any individual who wilfully attempts to evade tax, penalties, or interest, or under-reports income, faces rigorous imprisonment and fines. If the evaded amount exceeds twenty-five lakh rupees, imprisonment ranges from six months to seven years. For lesser amounts, the term is three months to two years. Additionally, offenders are subject to further penalties under other provisions of the Act. Wilful evasion includes possessing false documents, making false entries, omitting relevant information, or creating circumstances to evade tax obligations.