Penalty for failure to furnish report or for furnishing inaccurate report under section 511
[Section-459 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Section 459(1) of Income Tax Act 2025
459(1) If any reporting entity referred to in section 511, required to furnish the report referred to in sub-section (2) of the said section, for a reporting accounting year, fails to do so, the prescribed authority under that section may impose on such entity, a penalty of—
- 459(1)(a) five thousand rupees for every day for which the failure continues, if the period of failure does not exceed one month; or
- 459(1)(b) fifteen thousand rupees for every day for which the failure continues beyond the period of one month.
Section 459(2) of Income Tax Act 2025
459(2) If a reporting entity referred to in section 511 fails to produce the information and documents within the period allowed under sub-section (7) of the said section, the prescribed authority under that section may impose on such entity, a penalty of five thousand rupees for every day during which the failure continues, beginning from the day immediately following the day on which the period for furnishing the information and document expires.
Section 459(3) of Income Tax Act 2025
459(3) If the failure referred to in sub-section (1) or (2) continues after an order imposing a penalty under the said sub-sections, has been served on the entity, then, irrespective of the provisions of the said sub-sections, the prescribed authority may impose penalty of fifty thousand rupees for every day for which such failure continues starting from the date of service of such order.
Section 459(4) of Income Tax Act 2025
459(4) If a reporting entity referred to in section 511 provides inaccurate information in the report furnished under sub-section (2) of the said section, the prescribed authority under that section may impose on such entity, a penalty of five lakh rupees, if—
- 459(4)(a) the entity has knowledge of the inaccuracy at the time of furnishing the report but fails to inform the prescribed authority; or
- 459(4)(b) the entity discovers the inaccuracy after the report is furnished and fails to inform the prescribed authority and furnish correct report within fifteen days of such discovery; or
- 459(4)(c) the entity furnishes inaccurate information or document in response to the notice issued under section 511(7).
FAQs on Section 459 of Income Tax Act 2025
What is the penalty for failure to furnish the report required under section 511(2) within one month?
A penalty of five thousand rupees for every day during which the failure continues, if the failure does not exceed one month.
What is the penalty if the failure to furnish the report under section 511(2) continues beyond one month?
A penalty of fifteen thousand rupees for every day for which the failure continues beyond the initial one-month period.
What happens if a reporting entity fails to furnish information or documents within the period allowed under section 511(7)?
A penalty of five thousand rupees for each day of continued failure, starting from the day immediately after the expiry of the allowed period.
Is there a higher penalty if the failure continues even after a penalty order is served?
Yes, a penalty of fifty thousand rupees per day is levied from the date of service of the order if the failure continues after the order under section 459(1) or 459(2).
What is the penalty for furnishing inaccurate information in the report under section 511(2)?
A penalty of five lakh rupees may be imposed.
When is the penalty of five lakh rupees for inaccurate reporting applicable?
It applies if the entity:
- had knowledge of the inaccuracy at the time of furnishing the report but failed to inform the prescribed authority; or
- discovered the inaccuracy later and failed to inform the prescribed authority and submit a corrected report within 15 days; or
- furnished inaccurate information or documents in response to a notice under section 511(7).
Does the penalty differ depending on whether the inaccuracy was discovered before or after submission?
No, the same penalty of five lakh rupees may apply in either case if the entity fails to take corrective action as required.
What is the maximum daily penalty for continued non-compliance after a penalty order is served?
The maximum daily penalty in such a case is fifty thousand rupees per day.
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