Section 271AA → Section 347
Penalty for failure to keep and maintain information and document, etc., in respect of certain transactions
Quick Answer
Section 271AA of the Income Tax Act, 1961 (Penalty for failure to keep and maintain information and document, etc., in respect of certain transactions) corresponds to Section 347 of the Income-tax Act, 2025, effective 1st April 2026. Status: Retained.
What changed for Section 271AA
Under the Income Tax Act, 1961, Section 271AA governs penalty for failure to keep and maintain information and document, etc., in respect of certain transactions. Penalty of 2% of the value of each international transaction for failing to maintain Transfer Pricing documents under Section 92D.
The new code maps this to Section 347: the provision is retained and renumbered as Section 347 of the Income-tax Act, 2025, applying from 1st April 2026. Retained. A highly punitive penalty designed to enforce strict TP documentation.
On the ground, changes to Section 271AA carry a High impact. Major risk for MNCs.
Sec 271AA
Provision Summary
Penalty of 2% of the value of each international transaction for failing to maintain Transfer Pricing documents under Section 92D.
Sec 347
Provision Summary
Retained. A highly punitive penalty designed to enforce strict TP documentation.
Key Changes & Highlights
- No change.
Related Sections
Frequently Asked Questions
What does Section 271AA of the Income Tax Act 1961 deal with?
Section 271AA of the Income Tax Act, 1961 covers penalty for failure to keep and maintain information and document, etc., in respect of certain transactions. Penalty of 2% of the value of each international transaction for failing to maintain Transfer Pricing documents under Section 92D.
Where does Section 271AA of the ITA 1961 go under the Income-tax Act, 2025?
Section 271AA of the Income Tax Act, 1961 maps to Section 347 of the Income-tax Act, 2025, effective 1st April 2026 (status: Retained). Retained. A highly punitive penalty designed to enforce strict TP documentation.
Why does the change to Section 271AA matter for taxpayers?
The transition impact for Section 271AA is rated High. Major risk for MNCs.
Disclaimer: This mapping of Section 271AA (Penalty for failure to keep and maintain information and document, etc., in respect of certain transactions) to Section 347 of the Income-tax Act, 2025 is for educational and reference purposes only, based on publicly available drafts and circulars. As Section 271AA is currently marked Retained, always confirm its treatment with a qualified Chartered Accountant before filing or making compliance decisions.
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