Income-tax amendments decriminalise certain offences and replace rigorous terms with graded simple imprisonment and fines. The substituted sections revise sanctions for failures to pay deducted or collected tax, wilful tax evasion, failure to furnish various returns, and non compliance with special audit directions. A uniform graded penalty framework is prescribed: where tax involved exceeds fifty lakh rupees, simple imprisonment up to two years or fine or both; where tax exceeds ten lakh but not fifty lakh rupees, simple imprisonment up to six months or fine or both; otherwise fine. Several prior rigorous imprisonment penalties are converted to this graded regime, one production offence is decriminalised, and special audit non compliance attracts simple imprisonment up to six months. Amendments have retrospective effect from 1 March 2026.
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Income-tax amendments decriminalise certain offences and replace rigorous terms with graded simple imprisonment and fines.
The substituted sections revise sanctions for failures to pay deducted or collected tax, wilful tax evasion, failure to furnish various returns, and non compliance with special audit directions. A uniform graded penalty framework is prescribed: where tax involved exceeds fifty lakh rupees, simple imprisonment up to two years or fine or both; where tax exceeds ten lakh but not fifty lakh rupees, simple imprisonment up to six months or fine or both; otherwise fine. Several prior rigorous imprisonment penalties are converted to this graded regime, one production offence is decriminalised, and special audit non compliance attracts simple imprisonment up to six months. Amendments have retrospective effect from 1 March 2026.
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