Income Tax Act 2025: Section 481 for Tax Year 2026-27

Failure to produce accounts and documents

[Section-481 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]

If a person wilfully fails to produce, or cause to be produced, the accounts and documents as are referred to in the notice served on him under section 268(1) on or before the date specified in such notice, or wilfully fails to comply with a direction issued to him under section 268(5) of, he shall be punishable with rigorous imprisonment for a term which may extend to one year and shall also be liable to fine.

FAQs on Section 481 of Income Tax Act 2025

What does Section 481 of the Income Tax Act, 2025 deal with?
Section 481 deals with the failure to produce accounts and documents when required under a notice or direction issued under Section 268.

What kind of notice or direction is referred to in Section 481?
It refers to a notice under Section 268(1) or a direction under Section 268(5) that requires a person to produce certain accounts and documents.

What is the consequence of wilfully failing to produce documents as per a notice under Section 268(1)?
Wilful failure to produce the required documents or accounts on or before the specified date in the notice can lead to punishment under Section 481.

What is the punishment prescribed under Section 481 for failure to produce documents?
The punishment includes rigorous imprisonment for a term which may extend to one year, along with a fine.

Is the offence under Section 481 applicable only when there is wilful failure?
Yes, the offence under Section 481 is attracted only when there is wilful failure to comply with the notice or direction.

Does the section specify a minimum term of imprisonment?
No, Section 481 specifies only the maximum term of rigorous imprisonment, which may extend to one year. It does not prescribe a minimum term.

Is there any monetary penalty in addition to imprisonment under Section 481?
Yes, the person is also liable to pay a fine in addition to the possibility of rigorous imprisonment.

When does Section 481 come into effect?
Section 481 of the Income Tax Act, 2025 comes into effect from 1st April, 2026.

Does Section 481 require the failure to be intentional?
Yes, the failure must be wilful for the penalty provisions of Section 481 to apply.

Can proceedings under Section 481 be initiated without issuing a notice under Section 268?
No, the section applies only if there is a prior notice under Section 268(1) or direction under Section 268(5).