Failure to pay tax collected at source
[Section-477 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Section 477(1) of Income Tax Act 2025
477(1) Where a person fails to pay to the credit of the Central Government the tax collected by him as required under section 394, he shall be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to seven years and shall also be liable to fine.
Section 477(2) of Income Tax Act 2025
477(2) The provisions of this section shall not apply if the payment of the tax collected at source has been made to the credit of the Central Government at any time on or before the time prescribed for filing the statement under section 397(3)(b) in respect of such payment.
FAQs on Section 477 of Income Tax Act 2025
What is the punishment for failure to pay tax collected at source under Section 477(1) of the Income Tax Act, 2025?
If a person fails to pay the tax collected at source to the credit of the Central Government as required under Section 394, they are punishable with rigorous imprisonment for a term not less than three months, which may extend to seven years, and shall also be liable to a fine.
Does the law provide any relief from punishment for delayed payment of tax collected at source?
Yes, under Section 477(2), the punishment under Section 477(1) does not apply if the tax collected at source is paid to the credit of the Central Government on or before the time prescribed for filing the statement under Section 397(3)(b).
What is the minimum imprisonment term for failure to pay tax collected at source under Section 477(1)?
The minimum imprisonment term is three months.
What is the maximum imprisonment term for this offence?
The maximum imprisonment term is seven years.
Is a fine also applicable along with imprisonment for failure to pay tax collected at source?
Yes, in addition to imprisonment, the person is also liable to a fine.
Can a person avoid punishment by paying the tax collected at source later?
Yes, if the tax is paid to the credit of the Central Government on or before the due date for filing the statement under Section 397(3)(b), the provisions of Section 477(1) shall not apply.
Under what condition is Section 477(2) applicable?
Section 477(2) applies when the tax collected at source is paid before or on the prescribed due date for filing the statement under Section 397(3)(b).
Is imprisonment under Section 477(1) simple or rigorous?
The imprisonment prescribed is rigorous.
Which section mandates the collection of tax at source?
Tax collection at source is mandated under Section 394 of the Income Tax Act, 2025.
Which section prescribes the due date for filing the statement related to tax collected at source?
The due date is prescribed under Section 397(3)(b) of the Income Tax Act, 2025.
Is Section 477 applicable if the tax collected is never deposited at all?
Yes, if the tax collected is never deposited and the deadline under Section 397(3)(b) has passed, Section 477(1) applies and punishment can be imposed.
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