Section 478 - Wilful attempt to evade tax, etc.

Law punishes wilful tax evasion, false entries, or under-reporting with rigorous imprisonment and fines based on amount involved

The provision criminalizes wilful attempts to evade tax, penalty or interest, or under-report income, prescribing rigorous imprisonment and fine: where the amount involved exceeds ?25 lakh, imprisonment is six months to seven years; otherwise three months to two years. Separate punishments apply for wilful evasion of payment, carrying three months to two years' imprisonment and possible fine. These penalties are without prejudice to other statutory penalties. 'Wilful attempt' includes possession or creation of false entries in relevant books or documents, omission of relevant entries, or creating circumstances that enable tax evasion.