Income Tax Act 2025: Section 448 for Tax Year 2026-27

Penalty for failure to deduct tax at source

[Section-448 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]

Section 448(1) of Income Tax Act 2025

448(1) If any person fails to—

• 448(1)(a) deduct the whole or in part, the tax as required under Chapter XIX-B; or
• 448(1)(b) pay or ensure the payment of, the whole or any part of the tax as required by or under—
  • (i) Note 3 in Table in section 393(3); or
  • (ii) Note 6 to section 393(1) (Table: Sl. No. 8),

then, the Assessing Officer may impose on him, a penalty equal to the tax which such person failed to deduct or pay or ensure payment of, as aforesaid.

FAQs on Section 448 of Income Tax Act 2025

What is the penalty for failure to deduct tax at source under Section 448(1)?
If a person fails to deduct the whole or part of the tax as required under Chapter XIX-B, the Assessing Officer may impose a penalty equal to the amount of tax that was not deducted.

Does the penalty also apply if tax is not paid or ensured to be paid under specific provisions?
Yes, if a person fails to pay or ensure payment of tax as required under Note 3 in Table in section 393(3) or Note 6 to section 393(1) (Table: Sl. No. 8), the Assessing Officer may impose a penalty equal to the tax not paid or ensured.

Is the penalty under Section 448(1) automatic or discretionary?
The penalty is discretionary and may be imposed by the Assessing Officer if the person fails to comply with the deduction or payment obligations.

What provisions of the Income Tax Act, 2025 are referenced in Section 448(1)?
Section 448(1) references Chapter XIX-B, Note 3 in the Table under section 393(3), and Note 6 under section 393(1) (Table: Sl. No. 8).

From when is Section 448(1) applicable?
Section 448(1) is applicable with effect from 1st April, 2026.

What is the quantum of penalty under Section 448(1)?
The penalty is equal to the amount of tax that the person failed to deduct or pay or ensure payment of.

Who can impose the penalty under Section 448(1)?
The Assessing Officer has the authority to impose the penalty under this provision.

Does Section 448(1) cover partial failure to deduct or pay tax?
Yes, the section explicitly includes failure to deduct or pay the whole or part of the tax.

Is there any relief or waiver from penalty under Section 448(1)?
Section 448(1) does not itself provide for relief or waiver; any such possibility would be subject to other provisions of the Act or the Assessing Officer’s discretion.

Does the penalty under Section 448(1) apply even if the taxpayer later pays the due tax?
Yes, the penalty can still be imposed for the initial failure to deduct or ensure payment, regardless of whether the tax is subsequently paid.