Penalty in respect of certain income
[Section-443 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Section 443(1) of Income Tax Act 2025
443(1) The Assessing Officer or the Joint Commissioner (Appeals) or Commissioner (Appeals) may impose a penalty of 10% of the tax payable under section 195(1)(i), on an assessee if the income determined in his case for any tax year includes any income referred to in section 102, 103, 104, 105 or 106.
Section 443(2) of Income Tax Act 2025
443(2) The penalty under sub-section (1) shall be payable in addition to the tax payable under section 195.
Section 443(3) of Income Tax Act 2025
443(3) No penalty shall be levied on income referred to in section 102, 103, 104, 105 or 106 to the extent such income has been included by the assessee in the return of income furnished under section 263 and the tax as per section 195(1)(i) has been paid on or before the end of the relevant tax year.
Section 443(4) of Income Tax Act 2025
443(4) No penalty under section 439 shall be imposed upon the assessee in respect of income referred to in sub-section (1).
Section 443(5) of Income Tax Act 2025
443(5) The provisions of sections 471 and 472 shall as far as may be, apply in relation to the penalty referred to in this section.
FAQs on Section 443 of Income Tax Act 2025
What is the penalty under Section 443(1) of the Income Tax Act, 2025?
A penalty of 10% of the tax payable under section 195(1)(i) may be imposed by the Assessing Officer, Joint Commissioner (Appeals), or Commissioner (Appeals) if the income determined includes any income referred to in sections 102, 103, 104, 105 or 106.
Who can impose the penalty under Section 443(1)?
The Assessing Officer, the Joint Commissioner (Appeals), or the Commissioner (Appeals) may impose the penalty.
Is the penalty under Section 443(1) in addition to tax payable?
Yes, as per Section 443(2), the penalty is in addition to the tax payable under Section 195.
Can penalty be avoided if the assessee includes the income in the return?
Yes, according to Section 443(3), no penalty shall be levied if the income referred to in sections 102 to 106 is included in the return furnished under Section 263 and tax under section 195(1)(i) is paid on or before the end of the relevant tax year.
What if the assessee has already paid tax and filed the return properly?
If the income has been properly disclosed in the return under Section 263 and tax is paid in time under Section 195(1)(i), then no penalty under Section 443(1) will be levied as per Section 443(3).
Does Section 443 affect penalty under Section 439?
Yes, as per Section 443(4), no penalty under Section 439 shall be imposed in respect of income referred to in Section 443(1).
Are there procedural provisions applicable to this penalty?
Yes, Section 443(5) states that the provisions of Sections 471 and 472 shall apply, as far as may be, in relation to the penalty referred to in Section 443.
Which types of income attract penalty under Section 443?
Income referred to in Sections 102, 103, 104, 105, or 106 attracts penalty under Section 443 if not disclosed and tax is not paid as required.
Is partial disclosure sufficient to avoid penalty under Section 443?
Penalty is not levied only to the extent of income that is included in the return and on which tax under Section 195(1)(i) is paid by the end of the relevant tax year.
Can the same income be penalized under both Section 443 and Section 439?
No, Section 443(4) specifically prevents penalty under Section 439 in respect of the income already covered under Section 443.
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