Tax evasion penalties get a graded imprisonment and fine framework under the amended income tax provision. Section 278 is amended to substitute a graded punishment framework for offences involving false declarations, accounts or statements, and wilful attempts to evade tax, penalty or interest. The revised clauses prescribe simple imprisonment up to two years, or fine, or both, where the evasion amount exceeds fifty lakh rupees; simple imprisonment up to six months, or fine, or both, where the amount exceeds ten lakh rupees but does not exceed fifty lakh rupees; and fine in any other case. The amendment takes effect from 1 March 2026.