Graded penalty for false tax statements and accounts now links imprisonment and fine to the evaded tax amount. Section 277 of the Income-tax Act is amended to replace the punishment clauses for false statements or accounts that would have caused tax evasion, with effect from 1 March 2026. The revised structure prescribes simple imprisonment up to two years, or fine, or both, where the evaded tax amount would exceed fifty lakh rupees; simple imprisonment up to six months, or fine, or both, where the amount would exceed ten lakh rupees but not fifty lakh rupees; and fine only in all other cases. The amendment introduces a graded penalty framework linked to the amount of tax that would have been evaded.