Amended and updated notes on section 271C of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962. Detail discussion on provisions and rules related to Penalty for failure to deduct tax at source.
Chapter XXI (Sections 270A to 275) of the Income Tax Act 1961 deals with the provisions related to penalties imposable. Section 271C of IT Act 1961 provides for Penalty for failure to deduct tax at source.
Recently, we have discussed in detail section 271BA (Penalty for failure to furnish report under section 92E) of IT Act 1961.
Today, we learn the provisions of section 271C of Income-tax Act 1961 as amended by the Finance Act 2022. The amended provision of section 271C is effective for financial year 2022-23 relevant to the assessment year 2023-24.
In this article, you will learn detail of the provisions of section 271C of the Income Tax Act, 1961 Bare Act read with the Income-tax Rules, 1962 as provided by Ministry of Law and Justice, Government of India.
Section-271C: Penalty for failure to deduct tax at source
Section 271C (1):
If any person fails to—
(a) deduct the whole or any part of the tax as required by or under the provisions of Chapter XVII-B; or
(b) pay the whole or any part of the tax as required by or under—
- (i) sub-section (2) of section 115-O; or
- (ii) the
secondproviso to section 194B,
then, such person shall be liable to pay, by way of penalty, a sum equal to the amount of tax which such person failed to deduct or pay as aforesaid.
[Sub-clause(ii) in clause (b) in sub-section (1) of section 271C amended(omitted) w.e.f. 1-April-2022 by the Finance Act 2022]
Section 271C (2):
Any penalty imposable under sub-section (1) shall be imposed by the Joint Commissioner.