Income Tax Act 2025: Section 466 for Tax Year 2026-27

Penalty for failure to comply with the provisions of section 254

[Section-466 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]

If a person fails to comply with the provisions of section 254, the Joint Commissioner, Deputy Director or Assistant Director or the Assessing Officer, may impose a penalty which may extend up to one thousand rupees on him.

FAQs on Section 466 of Income Tax Act 2025

What does Section 466 of the Income Tax Act, 2025 deal with?
Section 466 deals with the penalty imposed for failure to comply with the provisions of section 254 of the Act.

Who can impose the penalty under Section 466?
The penalty may be imposed by the Joint Commissioner, Deputy Director, Assistant Director, or the Assessing Officer.

What is the maximum amount of penalty that can be levied under Section 466?
The penalty may extend up to one thousand rupees.

Is the penalty under Section 466 automatic upon non-compliance with Section 254?
No, the penalty is not automatic. It is imposed at the discretion of the specified income tax authorities upon failure to comply with Section 254.

Does Section 466 specify a minimum penalty amount?
No, Section 466 only provides the maximum limit of the penalty; there is no minimum amount specified.

Can an assessee appeal against a penalty imposed under Section 466?
Yes, like other penalty orders, an assessee may generally have the right to appeal as per the relevant provisions of the Act.

Does the penalty under Section 466 apply to both individuals and other entities?
Yes, it applies to any “person” who fails to comply with Section 254, which includes individuals, firms, companies, and other entities as defined under the Act.

Is there any remedy if the person has a reasonable cause for the non-compliance?
While Section 466 does not explicitly mention reasonable cause, general principles of natural justice and provisions of the Act may allow consideration of reasonable cause during adjudication or appeal.

When does Section 466 become effective?
Section 466 is effective from 1st April, 2026.