The Statutory Brief

IT Act 1961 → 2025 / Section 271B

Penalties

Section 271B → Section 428(c)

Failure to get accounts audited — penalty becomes a fee

Section 271B of the old Income-tax Act, 1961 · new section 428(c) under the Income-tax Act, 2025

New reference Section 428(c) (fee) — CBDT mapping 446

Income-tax Act, 1961Section 271B

  • Penalty for not getting accounts audited u/s 44AB or not furnishing the report
  • Lower of 0.5% of turnover/gross receipts or ₹1,50,000
  • Levied by AO; reasonable cause defence under 273B
  • Applies to FY 2025-26 and earlier

Applies to FY 2025-26 (AY 2026-27) and earlier years.

Income-tax Act, 2025Section 428(c) (fee) — CBDT mapping 446

  • Section 428(c): fee for failing to get accounts audited/furnish report under section 63
  • ₹75,000 for delay up to one month
  • ₹1,50,000 thereafter
  • Section 446 (CBDT mapping) was substituted by Finance Act 2026 — now crypto-asset reporting penalty

Applies from tax year 2026-27 (from 1 April 2026).

What changed

A real change. From 1 April 2026 the audit default is a fixed fee, not a discretionary penalty, so the 'reasonable cause' route of the penalty provisions does not apply in the same way.

Practice notes

  • Check the due date of the audit report under section 63 for each tax year.
  • Similar fee for the transfer pricing accountant's report (172, old 92E): ₹50,000 / ₹1,00,000 under 428(d).

These are summaries, not the statutory text. Read the bare Act for both sections on the Income Tax Department's official site, which also has a side-by-side comparison utility.

Frequently asked

What is the penalty for late tax audit under the new Income Tax Act?

Fee under section 428(c): ₹75,000 if the delay is up to one month, ₹1,50,000 after that (Finance Act 2026).

Is section 271B still applicable?

For FY 2025-26 and earlier years under the 1961 Act, yes. From tax year 2026-27 the fee in section 428(c) applies.

What is section 271B called in the new Income-tax Act, 2025?

Section 271B of the Income-tax Act, 1961 corresponds to Section 428(c) of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27). Detailed reference: Section 428(c) (fee) — CBDT mapping 446.

What changed in section 271B under the new Income Tax Act?

A real change. From 1 April 2026 the audit default is a fixed fee, not a discretionary penalty, so the 'reasonable cause' route of the penalty provisions does not apply in the same way.

Is section 271B still applicable for FY 2025-26?

Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 271B of the 1961 Act. Section 428(c) of the 2025 Act applies from tax year 2026-27.

Related sections

44AB→63Tax audit of accounts for businesses and professions above turnover limits271A–275B→441–474Other penalties: books, audit, SFT, transfer pricing, PAN/TAN, procedure and limitation92E→172Transfer pricing accountant's report (Form 3CEB) for international and specified domestic transactions234F→428Late fee for filing the income tax return after the due date