Income Tax Act 2025: Section 463 for Tax Year 2026-27

Penalty for furnishing incorrect information in reports or certificates

[Section-463 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]

Section 463(1) of Income Tax Act 2025

463(1) Any accountant or merchant banker or registered valuer, shall be liable to pay a penalty of ten thousand rupees for any incorrect information in any report or certificate furnished under any provision of this Act or the rules made thereunder.

Section 463(2) of Income Tax Act 2025

463(2) The penalty under sub-section (1) shall be payable in respect of each incorrect report or certificate.

Section 463(3) of Income Tax Act 2025

463(3) The penalty under sub-section (1) shall be payable on directions of the Assessing Officer or the Joint Commissioner (Appeals) or the Commissioner (Appeals) where the inaccuracy mentioned in sub-section (1) is found by such authority in the course of any proceedings under this Act.

Section 463(4) of Income Tax Act 2025

463(4) In this section,—

• 463(4)(a) “merchant banker” means Category I merchant banker registered with the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992; and
• 463(4)(b) “registered valuer” means a person registered as a valuer under section 514.

FAQs on Section 463 of Income Tax Act 2025

What is the penalty for furnishing incorrect information in a report or certificate under the Income Tax Act, 2025?
Any accountant, merchant banker, or registered valuer is liable to pay a penalty of ₹10,000 for each incorrect report or certificate furnished under any provision of the Act or the rules made thereunder.

Is the penalty imposed per person or per incorrect report/certificate?
The penalty of ₹10,000 is imposed for each incorrect report or certificate, not per person.

Who can direct the imposition of the penalty under Section 463?
The Assessing Officer, the Joint Commissioner (Appeals), or the Commissioner (Appeals) can direct the imposition of the penalty if they find the inaccuracy during any proceeding under the Act.

From when is Section 463 of the Income Tax Act, 2025 applicable?
Section 463 is applicable from 1st April, 2026.

What is the definition of a “merchant banker” under Section 463(4)(a)?
A merchant banker is defined as a Category I merchant banker registered with the Securities and Exchange Board of India (SEBI) established under section 3 of the SEBI Act, 1992.

What is the definition of a “registered valuer” under Section 463(4)(b)?
A registered valuer is a person registered as a valuer under section 514 of the Income Tax Act, 2025.

Can the penalty under Section 463 be levied without any finding by the authorities?
No, the penalty is levied only when the Assessing Officer, Joint Commissioner (Appeals), or Commissioner (Appeals) finds the inaccuracy in the course of any proceedings under the Act.

Does Section 463 apply to incorrect information in all types of reports or only specific ones?
It applies to any report or certificate furnished under any provision of the Income Tax Act, 2025 or the rules made thereunder.

Is there any provision for waiver or reduction of penalty under Section 463?
Section 463 does not provide any specific provision for waiver or reduction of the penalty; it mandates a penalty of ₹10,000 per incorrect report or certificate.

Who are the persons specifically covered under Section 463 for this penalty?
Section 463 covers accountants, merchant bankers, and registered valuers.