Comparison of section 476 "Failure to pay tax collected at source." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ther sections (section 397(3)(a) in the enacted text vs section 394 in the Bill) and minor drafting variations concerning the timing language for the exclusion. The provisions affect persons who collect tax at source (tax collectors), the Central Government's revenue protection, and criminal prosecution authorities. Effective date or enactment date: Not stated in the document. Background & Scope Statutory hooks: The Old Version is captioned as "Clause 477" in the Income Tax Bill, 2025 - Old Version, and appears under the chapter heading OFFENCES AND PROSECUTION. It expressly operates in relation to the statutory duty to "pay to the credit of the Central Government the tax collected by him as required u/s 394." The clause establishes a....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....collector for remittance, but whether corporate officers or third parties are implicated depends on other provisions and rules not included. The clause's language does not elaborate mens rea, mitigation, or gradation of culpability. Exceptions/Provisos The single proviso-like sub-section (2) provides a temporal exemption: where payment to Government credit has been made "at any time on or before the time prescribed for filing the statement u/s 397(3)(b) in respect of such payment," clause 477 will not apply. The exemption is strictly temporal and appears to permit late physical remittance up to the prescribed statement-filing time; it does not mention other grounds for exemption such as bona fide error, insolvency, or set-off rights. ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ment/penalty under other Income-tax Act provisions. Differences between the two provisions and Practical Impact Topic Earlier Position (Clause 477 of the Income Tax Bill, 2025 - Old Version) Later/Enacted Position (Section 477 of the enacted Income-tax Act, 2025) Statutory cross-reference Refers to duty "as required u/s 394." Refers to payment "as required u/s 397(3)(a)." Exception wording (timing) Exception applies if payment "has been made to the credit of the Central Government at any time on or before the time prescribed for filing the statement u/s 397(3)(b) in respect of such payment." Exception applies if payment "has been made to the credit of the Central Government on or before the time prescribed for filing the ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e to fine" vs "and with fine"): Both impose fine in addition to imprisonment. There is no substantive change to the availability of fine as an accessory punishment; the enacted text's phrasing is more conventional for penal statutes but does not materially alter the penalty regime as expressed in these extracts. Practical Implications * Compliance and risk areas: Persons who collect tax at source face criminal exposure if they fail to pay the collected sum to Government. The clause sets a significant minimum term of imprisonment (three months) and a maximum of seven years, in addition to fine; this elevates the compliance risk profile for collectors. The exception is strictly time-bound to payment at any time on or before the prescri....