Section 476 — Failure to Pay TDS to Credit of Central Government | ITA 2025

Section 476 of the Income-tax Act, 2025 corresponds to s. 276 B of the Income-tax Act, 1961. STATUTORY ARCHITECTURE Imprisonment 3 months to 7 years with fine. Punishes failure to PAY DEDUCTED tax to Central Government -- NOT failure to…

Section 476 — - FAILURE TO PAY TDS TO CREDIT OF CENTRAL GOVERNMENT

Section 476 of the Income-tax Act, 2025 corresponds to s. 276B of the Income-tax Act, 1961.

Statutory text — Income-tax Act, 2025

22[(1) If a person fails to—

(a) pay the tax deducted at source by him to the credit of the Central Govern- ment, as required by or under the provisions of Chapter XIX-B; or

(b) pay tax or ensure payment of tax to the credit of the Central Government in respect of––

(A) any income by way of winnings from online games as referred in section 393(3) [Table: Sl. No. 2], excluding such winnings which are wholly in kind, as referred to in Note 2 to the said Table; or

(B) any sum by way of consideration for transfer of a virtual digital asset as referred in section 393(1) [Table: Sl. No. 8(vi)], excluding such consideration which is wholly in kind, as referred to in Note 6 to the said Table, he shall be punishable––

(i) with simple imprisonment for a term up to two years, or with fine, or with both, where the amount of such tax exceeds fifty lakh rupees; or

(ii) with simple imprisonment for a term up to six months, or with fine, or with both, where the amount of such tax exceeds ten lakh rupees but does not exceed fifty lakh rupees; or

(iii) with fine, in any other case.]

(2) The provisions of this section shall not apply if the payment referred to in sub-section (1)(a) has been made to the credit of the Central Government on or before the time prescribed for filing the statement under section 397(3)(b) in respect of such payment. Failure to pay tax collected at source.

STATUTORY ARCHITECTURE

Imprisonment 3 months to 7 years with fine. Punishes failure to PAY DEDUCTED tax to Central Government -- NOT failure to deduct (which is civil under s. 398/271C). Mens rea -- wilful default -- required.

PRACTITIONER PLANNING NOTES

Compounding available u/s 491 [279(2)] -- pay tax + interest + compounding fee (12-25% of tax depending on stage); avoid trial.
FA 2024: prosecution restricted to TDS not paid by 31-Mar of next FY post deduction -- CBDT Notification.
ITAT in CIT v. Madhumilan Syntex (2007) 290 ITR 199 (SC) -- delay of 2-3 weeks cured.
Compulsory company prosecution -- principal officer also chargeable u/s 487 [278B]; obtain Director protection by recording Board minutes showing no role.

CROSS-REFERENCES

s. 491 [279] -- sanction and compounding.
s. 486 [278AA] -- reasonable cause.
s. 487 [278B] -- offences by companies.
s. 490 [278E] -- presumption of culpable mental state.

← All sections (537)Act 2025 hub

INCOME-TAX ACT, 2025	INCOME-TAX ACT, 1961
2025 provision	1961 counterpart
s. 476 -- Failure to Pay TDS to Credit of Central Government	s. 276B